CPA Bulletin

When rules were brought in to require plant to be refurbished to the current standards on a seven-year cycle, it was expected that plant would be scrapped and new plant purchased to replace it. Unfortunately, the financial model never really allowed for that to be completely the case and this downturn will undoubtedly exacerbate that position. If there is an upturn towards the end of 2021, as recently suggested by Network Rail, it is unclear what compliant plant will still be available for hire. In the meantime, the damage caused to those businesses that convert and upgrade rail plant will also be strained to the limits. The issue over labour is even more stark. It can take around two years for a competent plant operator from a civil engineering or construction background to be trained and mentored to achieve a competent standard as a road/rail excavator operator. Due to the downturn in work at the end of Control Period 5, one of the RPA members said that operators and fitters have moved back to the construction sector where financial return is now higher than rail. As a result, operators are getting used to working five week days with set shift patterns for more reward and far less stress on them and their families. The loss of workforce and the experience they take with them is irreplaceable. Anger The anger and distress among members is becoming palpable. At every twist and turn our members have embraced every rule and directive imposed by the infrastructure owner. They have embraced the desire to improve reliability and, although plant failures can never be totally eradicated, they have invested heavily in mechanics and systems to bring failure rates down to negligible levels. Delays due to overruns have also improved in the last Control Period due, in part, to the hard work of our members in working with customers and investing in systems and training. The new Control Period 6 has now commenced, and Network Rail has announced which contractors will be carrying out the Tier One contracts, but without any formal mechanism for our members to negotiate plant supply contracts. Indeed, there is a newmechanism for what have become known as mini-contracts where work can be let outside of the tier one contracts, giving an opportunity to put more pressure on plant rates, which have not increased for some time. With that background, it is understandable that many plant suppliers are saying they feel betrayed. They go through every hoop to be compliant and deal with every directive that comes into force, but it very often feels that it is all one way. Rules filter down with very little input going back to the infrastructure owner, particularly regarding the costs of each change. Supermarket collaboration One of our members used the analogy of the supermarket business where there is collaboration throughout the supply chain to ensure those at the bottom of the line, producing the goods, are always able to continue to supply. Goodwill is needed at every stage of the supply chain. Companies are now experiencing a perfect storm. Already highly geared from investing in Control Period 5, and with commitments to new plant and upgrades ready for Control Period 6, income to pay off debt is falling sharply throughout the industry. With a disillusioned labour force that is unlikely to be needed for some years, there are considerable costs that are difficult to substantiate in the long-term. Overheads remain high due to the compliance issues that are specific to the rail industry and it is difficult to see a way forward. Already we are seeing insolvencies of specialist contractors and our members believe that this will be the trend within the industry for the immediate future. This time though, because there are so few suppliers, it will take many years to revert back to a reasonable supply of plant and competent labour when the winds stop blowing. In the meantime, we will do all we can to provide the service rightly demanded by our customers, but the spikes of activity at major holidays could well be a challenge too far. Work together We implore all industry leaders to take a look at the situation and work together to see how the current dynamics can be changed and the workload reset. Some contractors are feeling the effects of this downturn and the converters and maintainers are also expressing concerns. The RPA is offering to work collaboratively with all those who have an interest in the rail industry, to ensure a prosperous future for everyone involved in improving and maintaining the railway infrastructure every week. RAIL PLANT ASSOCIATION: 2 54 CPA Bulletin > November 2019 www.cpa.uk.net