3.193 System operation is important: it is about planning and managing the use of the whole system efficiently, rather than building, owning and maintaining it. Good system
operation is not about getting more traffic on to the network at all costs - it is about optimising within constraints, including customers‟ and funders‟ requirements. The
119 These regulations implement the Environmental Noise Directive in England and require, on a five
year cycle, the production of strategic noise maps and the preparation of Action Plans for large urban areas (agglomerations), roads and railways, based on the results of the noise mapping.
120 The Department for Environment, Food and Rural Affairs maps noise on the rail network to identify
areas with significant noise nuisance. The mapping is used to direct actions that mitigate nuisance noise from the rail network. Further information can be found on the Department for Environment, Food
nature and extent of the constraints that exist on the rail network differ from those that exist in other network industries. For example, the opportunities for interchange and diversion are limited, as passengers do not like changing trains.
Aims and objectives
3.194 In our draft determination, we reiterated our intention to develop a new system operation capability enabler. We said that this new enabler would measure the performance of system operation functions, including, but not limited to: the process of assembling, validating and publishing the timetable, possessions planning,
understanding / measuring capacity availability and utilisation, network planning and network change. We said that:
(a) the enabler will take the form of a dashboard of measures (rather than any single measure);
(b) an illustrative dashboard will be drawn up and agreed with Network Rail in time for inclusion in the final determination;
(c) the exact content of the dashboard will be consulted on by Network Rail as part of its December 2013 draft delivery plan;
(d) the dashboard will be finalised and in place before the start of CP5; and (e) we will expect Network Rail to publish its performance against dashboard
measures annually throughout CP5 and we will keep its content under review. 3.195 Our measurement of the performance of system operation functions should help
improve our understanding of Network Rail‟s decision making. Measurement should provide clarity as to whether Network Rail has the information, capability and
incentives to make the right decisions at the right time in the right way to optimise the use of the existing network and to plan capacity enhancements. It should help to identify what improvements are required including whether Network Rail has the right incentives to encourage and support good system operation performance. Measures should provide transparency and assurance to access beneficiaries and funders, help to promote fairness and facilitate more informed decision making.
3.196 It is important to stress that, overall, our intention is not to create a new raft of
measures that we are going to monitor and regulate to. The measures should provide insight to Network Rail‟s performance in carrying out its system operation activities. If Network Rail is able to demonstrate its progress and good performance of its system operation functions then the regulatory framework can adapt and respond accordingly.
Response to draft determination consultation and industry views
3.197 In its response to the draft determination, the Rail Freight Group stated that it supports the need to develop the system operator function and to encourage this through the outputs framework. DB Schenker noted that good system operation is critical. Freightliner stated that it considered that further work on the role and
responsibilities of the system operator, drawing on input from TOCs and FOCs, is urgently needed to develop the system operator concept, since it is not yet fully developed or understood in the wider industry.
3.198 Chiltern considered that there is no framework to encourage Network Rail to get more capacity out of the existing system and that Network Rail is „programmed‟ to prioritise performance results over sale of capacity. It noted that there are many ways of
creating additional capacity without embarking upon major schemes and that Network Rail currently lacks an incentive to chase out these initiatives because the incentive signals are about achieving performance targets and maintaining and renewing the asset. Chiltern would expect a world class system operator to naturally seek out these opportunities.
3.199 DB Schenker raised concerns about the potential effect of devolution on Network Rail‟s performance of its system operator functions and while it acknowledged Network Rail having established a central freight team to deal with this concern, it suggested that the pace of devolution may test the effectiveness of these
arrangements. Freightliner raised concerns around Network Rail‟s train planning service and the apparent devolution of powers over access rights to its routes. It highlighted the importance of an integrated approach, particularly as freight operators‟ paths usually cross many routes and stressed the importance of our continued role as a „referee‟ on issues around access to the network.
3.200 Freightliner stated that it supports our proposal in terms of developing an illustrative dashboard, and was happy to contribute to a better definition and understanding of the system operator concept. DB Schenker cautioned that a dashboard of measures must not be overtaken by events – for example a switch from rail to road – and
suggested that the dashboard should be capable of illustrating qualitative issues – for example path quality.
3.201 Network Rail stated that while it, in principle, agrees with developing a dashboard of metrics to measure system operator performance, it recognised the importance of avoiding conflicting impacts/perverse incentives. For example, Network Rail is keen to align the system operator metrics with the Journey Time metric.
3.202 Beyond the draft determination, Network Rail has sought the views of the industry through discussion of the emerging dashboard of measures with the Planning Oversight Group (POG). RDG wrote to us on 2 October 2013 to inform us that POG will support Network Rail in developing meaningful and useful indicators to be
included in Network Rail‟s draft delivery plan. To facilitate this, POG has established a sub-group with cross-industry representation. We welcome this wider industry
involvement in developing the dashboard and agree that suitable measures should provide transparency and assurance to operators and funders.
Capacity measures
3.203 In our view it should be possible to develop a measure or set of measures of capacity availability and utilisation. It should also be possible to measure capacity constraints and the extent to which Network Rail is minimising those constraints that are within its control. However, we recognise that developing useful capacity measures for railways is challenging and that there are few existing reliable measures of capacity availability and utilisation.
3.204 Recently, Network Rail has conducted pilot studies of how the network is used - to identify both theoretical capacity and actual utilisation and the reasons why they differ. This work has helped to highlight some of the constraints e.g. customer and funder requirements for different rolling stock speed characteristics or stopping patterns. This could aid future discussions as to the possible removal or relaxation of some of these constraints to improve efficiency in the management of network capacity and so allow Network Rail to increase both performance and capacity utilisation at the same time. 3.205 Network Rail will analyse other parts of the network – focusing on those parts of the
network where there are competing and conflicting demands for the use of capacity. The work should facilitate more informed decision making. It might, for example, create an overall improvement in, and speeding up of, the handling of access applications.
Illustrative dashboard
3.206 Ultimately we are interested in whether Network Rail is delivering good outcomes from system operation. Many system operation functions contribute to outcomes but are not measurable. For example, a good process for assembling, validating and publishing the timetable should help to deliver the „right‟ capacity utilisation and operational performance.
3.207 Types of outcome measures which may be suitable for inclusion in the system operation dashboard include:
(a) capacity or volume related measures i.e. how much the system is used. For example, actual train km per track km could be measured until such a time as reliable and robust capacity measures are developed;
(b) performance or quality related measures i.e. punctuality, delays, cancellations etc. Measures could, for example, include average lateness per passenger and the Freight Delivery Metric;
(c) customer perceptions and service related measures i.e. appreciation, response times etc. This could include measures which reflect responses to the National Passenger Survey and freight end user surveys; and
(d) financial related measures i.e. indicators of optimal system operation including trade-offs. This could include measures such as cost of performing system
operator functions or payments under various regulatory contractual and financial incentives regimes e.g. Schedule 8.
3.208 While outcome measures are important we recognise they can be indicators of the performance / behaviours of parties other than the system operator. This also means that many of these measures feature elsewhere in our measurement of Network Rail or industry performance.
3.209 We understand that the POG sub-group is of the view that measures included in the dashboard should focus on the outcomes that access beneficiaries expect from an effective system operator. It considers that the metrics and measurements should be of use to the industry, ORR and funders in assessing the performance of those functions clearly defined within the system operator capability. However, the POG sub-group recognises also that many of the outputs, indicators and enablers relevant to Network Rail at national and route level will also provide evidence of overall
performance.
3.210 In addition to these high level measures, we have also looked at what practical
problems Network Rail and operators face „on the ground‟. Network Rail is working to develop and improve the tools, information, data and processes on which good system operation relies. These capability improvements include:
(a) capacity and performance management121; (b) people, skills and culture122; and
(c) the long term planning process123.
3.211 Measures of these improvements in inputs and processes are important. Network Rail will identify suitable indicators of the progress of these work streams - for example key project milestones - for inclusion in the dashboard. This should allow us and the
industry to monitor the development of the company‟s capability to perform its system operation functions.
Next steps
3.212 We will continue to work with Network Rail and the wider industry (through the POG sub-group) to develop the measures for the dashboard. The dashboard must be agreed and put in place before the start of CP5. Since measures, for example of
121 This aims to better understand and reconcile trade-offs between different uses of the network.
Currently, there are three significant areas: a) supporting and influencing funders and timetable
participants in franchise and significant timetable change; b) balancing the allocation of access for train operation and efficient infrastructure management; and c) providing a clearer framework of the decision support tools to inform capacity planning.
122 This involves investment in people and plans to develop the right capabilities and skills in the
organisation through targeted training and development programmes.
capacity availability and utilisation, are at an early stage of development they will require further refinement over CP5. This will necessitate close working with Network Rail and the on-going support and engagement of the wider industry.