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16 May 2018

Launch of Network Rail's Digital Strategy


Network Rail’s Digital Railway Strategy was launched by Transport Secretary Chris Grayling and Network Rail Chief Executive Mark Carne at an event in York on the 10 May 2018. Mark Carne's speech provides helpful insights into what the "Digital Railway" means over the course of the next few years:

  • all new trains and signalling will be digital or digital ready from 2019 (with the Secretary of State committing to procuring digital enabled trains and to convert freight trains to be digital-ready, which is matched by Network Rail's commitment to install only digital ready signalling);
  • significant increases in capacity will be created on the busiest urban networks as trains can run safely closer together (with routes into London Waterloo, together with parts of the East Coast Main Line and TransPennine routes being the first to benefit);
  • the implementation of the strategy will enable trains to run faster, closer together in greater safety and with more reliability; and
  • with line side equipment removed, maintenance and renewal costs will be significantly less and signal failures should also be reduced in number, offering better passenger journeys.

This was heralded as 

“Not since the railway transformed from steam to diesel in the 1960s has a technological breakthrough held such promise to vastly improve our railway for the benefit of the millions of people and businesses who rely on it every day”.

Network Rail views the Digital Railway Strategy as a once in a generation opportunity given that well over half of Britain’s signalling system will be life expired in the next 15 years. It notes the successful introduction of the technology, not only elsewhere in the world but also on the Thameslink core in central London, London Underground as well as the Cambrian line in Wales.

Introduction in phases

The next three control periods spanning the next 15 years represent three different phases of Digital Railway rollout.

In CP6, Network Rail will focus on a line of route deployment. Network Rail has funding for the early development phases of converting the East Coast Main Line and the Secretary of State has announced that the TransPennine route upgrade will be the first digital intercity railway.

CP7 will build on the experience and capability from CP6 and be focused on regional deployment of ETCS.  For example, the whole track 40 miles from Waterloo will be digital within 10 years, providing the potential for a metro style service into Britain’s busiest railway station.

CP8 will see the link up of regional routes and build out a national network which opens up the prospect that when the UK first has a high speed backbone, it could also have a Digital Railway skeleton. The aim is by the time HS2 arrives in Manchester, the majority of the UK network – covering some 70% of journeys – will have undergone a technological transformation delivering faster, more frequent safer services to millions of passengers across the country.

The government has earmarked £450 million specifically for digital railway schemes.

The government has also put aside £5 million for Network Rail to develop proposals for embedding digital technology between Manchester and York, as part of the £3 billion upgrade of that route starting next year.

Onboard signalling

Alongside infrastructure upgrades, the introduction of the digital railway will necessitate the rollout of in-cab signalling across the entire rolling stock fleet. Line side signals will eventually be removed in some areas, meaning that all trains will have to be fitted with the on-train European Train Control System (ETCS) else they will not be able to operate on the network.

Of course, it is not clear what “digital” or “digital ready” for new trains will mean. Many trains are currently in procurement and/or are being built (including for Northern, TransPennine, Anglia and West Midlands). Many of these orders require “passive provision” for digital signalling only which basically means the trains could have an ETCS system plugged in. Is this digital ready? Or should the ETCS be fitted but not switched on? Rolling stock owners, financiers, operators and manufacturers will need to have clarity over what is required to build it into the procurement of new trains.

In relation to legacy fleet it is not clear how this new strategy fits with the existing first in class fitment programme Network Rail has been running with the ROSCOs. Is this more of the same or a different, operator-led approach and franchise agreement variation?

There will also be an age old chicken and egg problem to be solved with any ETCS (be that on new or old trains). How can the systems be tested on the trains until the track is ready? How can the track be truly ready and commissioned until there are digital trains to test?

What is clear is that the digital railway has and will form a key part of franchise commitments and deliverables. Bidders taking part in such competitions should become very familiar with any requirements relating to ETCS fitment as it will become a core part of the franchise proposition and will have impacts on staffing requirements (as staff will need to be trained on the new systems, estimated to take two weeks per driver) as well as the costs needing to be factored into the franchise bid. With vehicles being taken out of service for ETCS instalment, fleet management will also need to be a key consideration in bid submission. Driver management will also have to be factored in.

Ultimately, it will be the passenger operator who has financial (through increased rental payments) and contractual (in the franchise agreement) responsibility for installation of ETCS technology across the entire fleet. It will want rights to ensure the equipment supplier is doing what it has promised – suggesting a contract between the two will be vital.

Issues to address

Of course, the introduction of this exciting new technology does not come without risks and we consider a number of issues which the industry will need to be ready to address:

  • signalling responsibility: whilst the removal of line side signals will save Network Rail considerable sums of money, the introduction of in-cab technology means that Network Rail will no longer be wholly responsible for signalling. The train operator and the signalling system manufacturer will also have a role to play. In future, a “signal failure” may mean the on-train technology is not working;
  • delay responsibility: this then becomes a financial issue for the operator. Whilst Network Rail’s delay responsibility could be reduced through the introduction of the digital railway, the train operator may incur additional liability under its track access agreement for on-train equipment-based failures. If the ETCS failure causes delays to other services, this may not be a small sum;
  • passing on responsibility: will the train operator be able to pass on such liabilities to the ETCS equipment manufacturer and/or maintainer? This would require a direct contractual relationship between the two. Alternatively, will Network Rail always be responsible for signalling-related delays (as is almost always the case at present)? Should the signalling system supplier or the on-train equipment supplier be responsible? The solution is not yet clear;
  • testing and acceptance: as highlighted above, there will be a need to test and accept new trains with ETCS, but the manufacturer will not wish to take risk on whether the infrastructure supports the signalling and this may need to be considered in manufacturing and also in support contracts;
  • insurance: insurance arrangements may also need to be extended where the train operator is taking on signalling responsibility - previously an infrastructure-related issue;
  • procurement: the ROSCOs are likely to have the direct relationship with the signalling supplier. However, the train operators will be expected to manage the on-train signalling system on a day-to-day basis. Certain obligations will need to be flowed down from the ROSCOs to the train operator to ensure the system can be implemented in a timely manner, including ensuring access to the relevant rolling stock.

Ultimately, the digital railway project involves many elements with legal implications and legal risks for those involved. We welcome Network Rail's outline of its proposed strategy, as well as the recognition that it does not come without its challenges. The passenger benefits which could be delivered through implementation of the project are potentially huge – as Mark Carne commented, this is potentially a once in a generation opportunity. In implementing the strategy, care will need to be taken, with parties working closely together, to ensure the benefits are realised, whilst appreciating the risks involved.



Darren Fodey

Darren Fodey

T:  +44 20 7809 2388 M:  +44 7920 201 290 Email Darren | Vcard Office:  London

Tammy Samuel

Tammy Samuel
Partner and co head of rail

T:  +44 20 7809 2227 M:  +44 7766 991 053 Email Tammy | Vcard Office:  London

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