Alliances to Support the Railway Infrastructure of the United Kingdom:is the industry ready?

Abstract

This research project was borne out of a desire to explore whether the alliances now emerging in the railway industry between Railtrack and its infrastructure contractors, exhibit genuine mutual co-operation or are merely contrived to meet a given set of circumstances. Through a review of the literature, the turbulent history of the railways since privatisation is plotted and in particular, that of the monopolistic client Railtrack, and its relationship with the infrastructure contractors, the Regulatory authorities and the Government. Organisation and cultural theory is reviewed, together with those factors that encourage the formation of alliances. The research method was based on a phenomenological approach, designed to complement the literature review with a series of planned and opportunistic one-on-one interviews, the results of a questionnaire survey of key railway managers and information from attendance on Railtrack’s own alliance development training programme. The results of this research indicate that Railtrack has attempted to introduce a more collaborative relationship with its infrastructure contractors, but that this is probably as a consequence of the significant resource deficiency throughout the railway industry rather than the development of a purposeful, long-term co-operative strategy. The contracting regime was adjusted during 1999 to reflect a mood of optimism in the industry, however by the end of 2000, operational mismanagement, regulatory pressures and an eventual financial decline, saw a retrenchment to traditional, adversarial commercial arrangements. Data from the questionnaire reinforces the view that the industry only partially understands the concept of alliances, with the infrastructure contractors appearing to have more readily accepted the need to develop collaborative strategies to meet the growing demands of a railway investment programme. 35% of respondents commented on the lack of commitment in Railtrack, to deploying sufficient resources to the alliances formed with its contractors and also its preference to continue functioning as a traditional, dominant client. The dramatic events of 7" October 2001, when Railtrack was placed into Administration are now changing the face of the industry, with opportunities to rectify the commercial environment as well as organisational and cultural aspects. Lundberg’s model is used to place Railtrack at appropriate locations on the organisational learning cycle, both pre and post Administration, reflecting the reversion in the company’s fortunes. The research concludes that the railway industry is not yet ready to embrace the concept of alliances, although there are strong advocates amongst the infrastructure contractors, which will make this possible should cultural and organisational changes be achieved in the new Railtrack entity. Five recommendations are offered: first, that the Strategic Rail Authority must provide direction to the industry by publishing its Strategic Plan and confirm the long-term investment. Second that the Department of Transport, Local Government and the Regions must give the Strategic Rail Authority the freedom to direct the industry unhindered and to attract appropriate levels of private finance for the enhancement of the railway network. Third, the new Railtrack must implement a comprehensive change management programme, designed to introduce a cultural shift towards industry wide, long-term collaboration. Fourth, the infrastructure contractors strive to transfer their collaborative culture into the new Railtrack. Finally, in the present strategic vacuum, that the opportunity should be taken to explore a different business model for the industry, possibly considering the adoption of vertical integration involving the Strategic Rail Authority, Train Operating Companies, the new Railtrack and its infrastructure contractors.