Infrastructure Projects Strategic Plan - Network Rail

Infrastructure ProjectsStrategic PlanV4.0 Jan 2018 version

Infrastructure Projects Strategic PlanContents1.2.3.4.5.Forward & Summary . 41.1.Introduction . 41.2.Vision & Strategic Objectives . 41.3.Role of IP in Network Rail . 61.4.Contestability in CP6 . 71.5.Workforce Agility in CP6 . 81.6.Right Sizing the IP Organisation . 81.7.CP6 Supply Chain Strategy . 9Objectives & Stakeholder priorities . 112.1.Stakeholders & priorities . 112.2.How the Stakeholders have been engaged with. 122.3.Prioritised Needs Linked to Objectives Development . 132.4.Specific objectives for Infrastructure Projects . 14Structure & Operating Model. 173.1.Structure . 173.2.Operating Model . 173.3.lP Assurance Models . 18Risk Opportunities and Constraints . 204.1.IP Enterprise Risk Model . 214.2.lmprovements made in CP5 and plans for CP6 . 214.3.Key Risks, Opportunities & Constraints . 22Expenditure & Efficiency . 255.1.Work delivered . 255.2.Infrastructure Project costs . 265.3.Route Business Scotland details . 28Network Rail2

Infrastructure Projects Strategic Plan5.4.6.Risk and uncertainty in CP6 Plan. 29Sign-off . 30Appendix AFunctional Strategies . 31Appendix BKey assumptions . 44Appendix CSupply Chain Risks & Opportunities . 45Appendix DScenario planning – Narratives . 47Appendix EScenario planning – Headcount & Opex . 49Appendix FN/A . 52Appendix GN/A . 52Network Rail3

Infrastructure Projects Strategic Plan1. Foreword and Summary1.1. IntroductionInfrastructure Projects (IP) is the national infrastructure delivery division ofNetwork Rail and is responsible for the delivery of all major infrastructuredelivery works. This includes works to increase the capacity of thenetwork (enhancements) and renewal works which is the replacement oflife expired infrastructure with modern equivalent. Most enhancements aremulti-disciplinary in nature and renewals are asset specific.Last year, IP delivered 5.7b of work nationally and supported the deliveryof works undertaken by the Routes’ own works delivery teams. It is oncourse to deliver 28b of works for this control period (2015 – 2019)making it one of the largest infrastructure organisations in the UK.IP focusses on delivery of all works that are seen as large and complex,this includes all enhancements and major renewals, with some of the lesscomplex and smaller works delivered by the Routes themselves. IP’ssystems, processes and capability framework are utilised by the Routes todeliver these works. Having the Routes deliver simple and less riskyworks allows them to utilise spare capacity in their own works deliveryteams and make better use of routine access where minor renewals maybe combined with maintenance.Infrastructure Projects’ strengths are: Management of the complete Project Lifecycle Management of Engineering and Design Management of Supply Chain Management of Internal Client Management of Support Services & AssuranceIn addition, IP as an integrated part of Network Rail minimises thetransaction costs between it and its internal clients. This is particularlyimportant around the management of risk on large and complexenhancements and renewals. IP is structured to manage the portfolio ona Matrix basis with Regional and Major Programme Heads working closelyNetwork Railwith the Functional Directorate at the centre, this enables the portfolio tobe delivered efficiently and effectively, safely and with appropriate levels ofgovernance. It also facilitates continuous improvement and its ability tochallenge itself. Also, IP being a service organisation supports thedevolved Route businesses by ensuring continued maturity of Routes’interfaces, working collaboratively with route sponsors who own the clientrelationships.Network Rail was awarded “Client of the Year” in both 2016 and 2017 bythe New Civil Engineer reflecting significant improvements in itscollaborative working, supplier relationships and delivery performance. In2017, IP became one of the first 6 organisations globally to securecertification to ISO 44001, the new international standard for collaborativeworking.In addition, IP uses the P3M3 (Portfolio, Programme and ProjectManagement Maturity Model) methodology as a management maturitymodel to assess how it delivers its projects, programmes and portfolioacross the organisation. From a recent independent review undertaken, IPhas demonstrated an exceptional level of improvement since the start ofthe control period in 2014 achieving P3M3 maturity level 3 in all its regionsand national portfolios and setting the standard for the global transportsector scores. IP plans to build on these achievements in CP6 by furtherdeveloping areas with opportunities for improvement. With theseimprovements, IP will work to ensure that it is able to lead and influencethe industry as a client of choice through the deployment of best practices,efficient and cost effective delivery of projects.1.2. Vision & Strategic ObjectivesFollowing the Hendy Review and a re-baselining of the CP5 EnhancementDelivery Plan 18 months into the control period, substantial changes havebeen made to how IP develops, manages and delivers major programmes.The Enhancement Improvement Plan agreed with the ORR has beenimplemented to address concerns raised on project development and4

Infrastructure Projects Strategic Plandelivery; this includes strengthening the functions in the centre andintroducing the professions to support the operations of a matrixorganisation. In response to these recommendations, IP has developed achange programme designed to ensure we have the right capabilities andprocesses with a coordinated and prioritised approach to risk managementand business change.Our Vision The One Vision One Way (1V1W) programme is aimed at developing aconsistent approach to strengthening our internal engine, making surewe’re in the right shape to be able to deliver the wider Network RailStrategy and help to achieve our vison of being the best railinfrastructure project delivery organisation in the UK.“To be the best rail infrastructure project delivery organisationin the UK”Support ourclientsDelivery forrouteclientsFulfil ourobligationsProfessionsRisksSupportSTED andDigitalRailwayRightpeopleresourcesDeliverer ofchoiceAn agilebusinessOur StrategicObjectives One Vision,One Way ChangeProcessesSystemsIP’s leadership team has developed seven strategic objectives to support the achievement of IP’s vision. These set out to unify the business operating modelacross IP’s Regions, Programmes and Functions, ensuring that Route customers can expect services which match their needs and expectations to achievetheir plans. IP’s seven strategic objectives are:1.2.3.4.5.6.7.Support NR clients in developing their propositions for increasing network capacity.Safely deliver infrastructure projects ‘on time’, ‘on spec’, ‘on cost’ for our Route clients.Fulfil our obligations for NR and externally (DfT, Regional government, Operators & ORR.)Support and develop STED and Digital Railway.Provide the right level, quality and volume of people resource.Lead and influence the UK rail industry and are a client of choice.Develop an agile business.Network Rail5

Infrastructure Projects Strategic Plan1.3. Role of IP in Network RailWhy does NR choose to have IP?By having IP as its main delivery arm, Network Rail ensures that large,complex and high risk projects are delivered by a competent deliverer. Itbalances the appropriate level of risk control and project complexity withcost effectiveness by allowing internal resources and systems to be usedin the most productive and efficient manner. In addition, IP being thetechnical authority for NR on cost planning, commercial strategy anddelivery is able to provide expert service; set policy and provide assuranceand governance on capital delivery to the Board and ExecutiveCommittee.Other benefits why NR chooses to have its own internal delivery expertorganisation are: Closer collaboration with internal NR functions and Route clients.Adherence of world class standards and processes to supportefficient delivery of programmes.Economies of scale in projects delivery with increased and largeoutput leading to decrease in construction costs. Also lower realcosts of internal resources with no third party margins.Control over its design and development capabilities and ability togrow internal key infrastructure resource.Differences between Works Delivery and IPIn addition to IP as the internal deliverer of capital projects within NR, theRoutes also have their internal delivery teams – Works Deliveryorganisations. Works Delivery was established to assist productivity withinNR’s directly employed resource, and further ensure that IP were notundertaking low risk/low value works with process and procedures beingNetwork Railoverly bureaucratic for the simple activities, and therefore not being costeffective.NR uses the governance process defined by the GRIP and managementof level of control (LoC) standard to allocate enhancements capitalprojects. The level of control (LoC) process provides a risk basedassessment and guidance on the effort and detail required for planning,reporting and controlling projects and ultimately dictates the deliveryorganisation. The assessment takes account of 5 project considerations(in regard to novelty, technology & design, complexity, pace andoperational impact), and 4 Levels, which ultimately derive an overallproject assessment score from LoC 1 (high) to LoC 4 (low). The Sponsors’handbook (version 3.0 dated January 2016) then states how the financialthreshold and LoC are applied at various GRIP stages: If the project is Level of Control (LoC) 1 or 2 IP will be theDelivererIf LoC 3 or 4 and the project value is 250k the Deliverer can beIP or another internal DelivererIf LOC 3 or 4 and 250k the Deliverer can be IP, another internalDeliverer, or an external DelivererProjects 250k limit can be delivered by an external Deliverer byagreement between route and IPThe process of allocating renewals works is less defined but there isongoing engagement to standardise this approach across all capitaldelivery. This will ensure internal resources are optimised to achieve bestoutcomes on capital infrastructure delivery.There are a few potential delivery model options available across therenewals, enhancements and third parties funding categories. The tablebelow shows how work has been allocated in the current control periodbetween the various delivery organisations:6