Rail Industry - Unlocking the Potential

Andy Green
Rail projects continue to be strong performers in the UK, Europe and the US, although sector growth remains subject to challenges in the current economic uncertainty.

Railway asset owners and operators are looking at ways to maximise the effectiveness of the returns on their assets. Most operators have considerable unrealised potential in the form of land and building assets. These can be released, redeveloped or re-purposed to create additional income.

These strategic investment opportunities can reposition stations as a “gateway” to the destination or potentially act as a destination in their own right. Lessons learned from the airport model are increasingly put into practice at stations.

Retail, leisure and other commercial facilities generate improved customer satisfaction as well as increasing station income, which in turn has a positive effect on overall passenger facilities.

As a complete package, this improves the affordability of the railway to government, passengers and overall network operational efficiency. The immediate locality may also see station-led regeneration benefits. Examples include:

These opportunities are not restricted to the larger flagship schemes. In the right location, commuter stations can offer more than a quick coffee and a choice of magazine. Quality retail and dining experiences have proved to be robust and sustainable. Smaller stations are also upping their game, with many providing better car parking facilities, bicycle facilities and improved connectivity with other transport modes.

As well as maximising revenue generating potential, operating costs are also high on the industry’s agenda. The McNulty Report on the Rail Value for Money study outlined changes to reduce industry costs. Operating costs for the UK railway are 40 per cent higher than its counterparts in France, Holland, Sweden and Switzerland.

A number of serious cost deficiencies need to be addressed. One of these is the cost of repairs and maintenance to stations, due to the large number of interfaces and the complexity of ownership issues.

  • Currently train operators are responsible for the day to day operation of stations.
  • Maintenance, repair and development of stations are predominantly undertaken by the asset holder, with some works undertaken by the operator.

Operators are being urged to significantly reduce their combined operating costs and capital asset investment costs, by efficiently managing the total cost of ownership and maximising the utilisation and value of all their assets. The challenge of maintaining assets to the desired standard, within constrained budgets, underlines the imperative to achieve better value for money.

Support for the way forward?

Faithful+Gould is already helping clients find ways to optimise expenditure on maintaining their assets and many of these principles can benefit the rail industry. We are also supporting clients in formulating sustainable estate strategies to control the total costs of constructing, maintaining and life cycle asset replacement works.