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Use of Computers in Planning and Execution of Infrastructure Investment Transactions on the Built Environment vol 34, © 1998 WIT Press, www.witpress.com, ISSN 1743-3509 Use of computers in planning and execution of infrastructure investment. M G Reynolds Railtrack pic, Rail track House, Euston Square, Abstract Railtrack is the principal United Kingdom provider of access to rail infrastructure for passenger and freight train operating companies. The company was vested in April 1994 and privatised by flotation in May 1996. Expenditure on the British Rail infrastructure which passed to Railtrack in April 1994 had been cash-limited in the public sector, leading to accumulated investment requirements over and above the level needed to meet steady state conditions. This paper describes the computer applications used to assess the scale of, and subsequently manage and report upon, the resulting investment programme. 1 Introduction In the year 1996/7, Railtrack pic turnover was £2,437m, of which £2,278m was earned through sales to train operating companies of access to its rail infrastructure, including depots and stations. These access charges were determined by the Rail Regulator, taking into account Railtrack's operating, maintenance and renewal investment requirements. The access charges apply for a period of 6 years, and are about to be reviewed by the Regulator, for the period commencing in 2001. The Regulatory framework to 2001 also took cognisance of the investment backlog in operational property assets (stations and depots) which had previously accumulated due to cash constraints when the railway was in the public sector. Transactions on the Built Environment vol 34, © 1998 WIT Press, www.witpress.com, ISSN 1743-3509 150 Computers in Railways This investment workload relates principally to Railtrack's infrastructure assets. Over a route network of 16000 km, these include 2492 stations, 32000 km of track, 12000 km of electrification systems, 1010 signalling systems, and 40000 bridges, viaducts and tunnels. Annual investment in these assets ran at £733m in 1994/5, rising to over f 1200m in 1997/8, with peaks in excess of jB 1500m planned in the next five years. Railtrack recognised two important needs when it took responsibility for the network. The first was to establish effective systems for the management of investment from initial proposals through design and construction and into operational use. The second was to ensure value for money in investment projects. This paper describes the organisational structure created to handle investment, and the computing systems adopted and developed to ensure consistent and effective management of the process throughout the Company. 2 Investment Organisation 2.1 Investment and project management in British Rail British Rail (BR) was created in 1948, and operated as a fully integrated publicly owned railway corporation until 1994. For almost all of this period it was organised in three tiers : a central headquarters, five or six regional offices, and a larger number of divisional/area offices. The regional offices bore some relationship to the privately owned railway companies which had existed between 1924 and 1948, and often followed practices which were as much influenced by former organisations as they were by BR. Within all three tiers there was a strongly departmental culture, with operations, civil engineering, mechanical and electrical engineering and signals and telecommunications engineering as its dominant elements. The general effect of this was to create large numbers of investment projects, often individually assembled and managed. A small number of major projects were exceptions to this general position. Whilst introduction of the High Speed Diesel Train and general 125mph running in the 1970's, electrification of the East Coast Main Line in the 1980's, and system upgrading to prepare for Channel Tunnel opening in the 1990's are each examples of large projects effectively delivered, the general picture in 1994 was one of a large number of small and diverse projects throughout the network. Throughout 1993 and early 1994, Railtrack worked to address two key investment issues. The first was to understand the scale and nature of the investment programme which it would inherit, and then determine its criteria for future investment proposals. The second was to create an organisation, and supporting systems, to deliver the resulting investment portfolio. Transactions on the Built Environment vol 34, © 1998 WIT Press, www.witpress.com, ISSN 1743-3509 Computers in Railways 151 2.2 Determining the Investment Programme The scale and nature of determining the inherited investment programme is simply described : list all the investment projects, determine where they should be allocated in a privatised railway, then list all those which fall to Railtrack. The reality was that, with five principal businesses and more than twenty five profit centres in BR, simply creating a master list required patience and a painstaking eye for detail. However, even at this early stage, computers played an invaluable role. BR's Investment Monitoring and Planning System (IMPS) was used to collate details of all the projects. Once these details were to hand, assembling Railtrack's initial investment portfolio was a relatively straight forward process. The IMPS system and its successor are described in part three of this paper. Having understood the inherited investment plan, the company had to assess the likely future investment requirements and to establish criteria for reviewing investment proposals and prioritising the workload. At that time forward plans to develop the rail business were fairly limited, as most of the attention of Railtrack and its customers was on making substantial organisational and ownership changes, whilst continuing to deliver safe and effective services to users. Therefore, much of the initial effort went into understanding likely future investment volumes in three key areas, signalling, structures, and stations and depots. For signalling, future investment workloads were sized by reviewing the physical condition and the operational reliability of approximately 100 modern signalling centres installed since 1964, and using these to generate forecasts of future serviceable lives. For structures, where there are many more discrete assets to be considered, a statistical approach, supported by sampling, was used to determine the likely future investment needs. For stations and depots, over 2500 individual surveys were undertaken, and for each site a schedule was prepared of work required to meet safety and commercial requirements. For any investment programme, criteria are needed which identify priorities for action. For Railtrack this burden was heavier between vesting in 1994 and flotation in 1996, since the overall level of investment was constrained by the Government's external financing contribution targets. Among a range of available criteria, the ratio of net present value to investment cost proved to be a simple and effective ranking tool. 2.3 Creating the investment project organisation Section 2.1 described the variety of investment regimes which existed in BR. At the outset Railtrack determined that it would require to create a unified and professional project management team, with consistent processes and systems everywhere in the company. A major projects directorate was established, led from the centre but delivering investment needs through regional offices which were co-located with those of Railtrack's zonal directors. Most of the leaders Transactions on the Built Environment vol 34, © 1998 WIT Press, www.witpress.com, ISSN 1743-3509 152 Computers in Railways within the major projects team were drawn from outside the rail industry, introducing a breadth and depth of knowledge which had not previously been available on a system-wide basis. With the team in place, work proceeded to define the pre-feasibility, feasibility, design development and implementation phases of investment projects. Key project milestones, including authorisation, contractual commitment and commissioning were also defined. The roles of sponsor and of deliverer, and the importance of clear remits, were emphasised. The assessment and mitigation of risk, and the allocation of contingency between the sponsor and deliverer were defined, and work was put in hand to create an estimating database, feeding from current contract experiences. All these definitions, and the processes to support them, were incorporated within a single company project control manual. Finally, work commenced on establishing a project management control system (PMCS) which mirrored the definitions and processes described above. PMCS is at the heart of Railtrack's successful delivery of investment projects, and is described in full in section 3 of the paper. Throughout the first five years of the company, investment project management has been developed to meet company needs. At the end of March 1998, responsibility for delivery of investment passed from the centre to the seven zonal directors. Investment policy and processes are still led from the centre, and PMCS is a key tool for ensuring continuing investment consistency throughout the company. 3 Investment Systems 3.1 PMCS System Description 3.1.1 System Configuration The Project Management Control System (PMCS) was conceived as a database application to support and mirror Railtrack project management processes and procedures. Specifically, its development has been driven by the need to: • Provide a systematic and documented framework
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