When a transport authority has the vision to embrace innovation and to constructively challenge what the rail sector can deliver, transformative change can be achieved for the benefit of passengers and the wider community, and can serve as a new benchmark for the broader rail industry. The procurement of the Wales and Borders and South Wales Metro Rail Services contract is an example.
Rail services in Wales are set to undergo a transformation as control is devolved from the UK’s Department for Transport to the Welsh Government. The Welsh Government has established Transport for Wales (TfW) as a wholly owned, not-for-profit company to provide support and expertise on transport projects. TfW is currently undertaking the procurement of the Wales and Borders Rail Service and South Wales Metro.
On behalf of the Welsh Government, TfW is taking an innovative approach to procuring the new rail services contract, that will see not only major improvements to journey opportunities and service quality, but also transfer of control of infrastructure of the Core Valley Lines (CVL) network from the national Infrastructure Manager (Network Rail) to TfW.
The Core Valleys Lines comprise four routes totalling just under 110 kilometres, linking the valleys’ former coal mining towns with the Welsh capital, Cardiff. Under the new contract, the CVL will be transformed to create a much-enhanced transport system. This will form a key element of TfW’s strategy to create a South Wales Metro and to support economic development of the region.
TfW is following a competitive dialogue process to procure an Operator and Development Partner (ODP) who will be responsible for investing in, transforming and maintaining the CVL infrastructure, and operating over 1000 daily passenger rail services throughout Wales.
It is the first time that this competitive dialogue procurement process has been used on a major UK rail service contract. The process enables the Welsh Government to set out its key objectives and then to invite bidders to respond with their initial outline solutions.
On behalf of the Welsh Government, TfW is then able to engage with each bidder through a process of dialogue. It can clarify its requirements, and receive feedback on how requirements and the commercial structure could be refined, to allow the market to offer improved, better-value solutions. Following the dialogue process, detailed proposals are prepared by bidders against a common specification, and the contract will be awarded following a defined bid evaluation process. Relationships established between TfW and bidders during the dialogue process will help to support both rapid and effective mobilisation of the ODP following contract award and to assure successful delivery.
While the Welsh Government has taken great care to set out its key minimum requirements for the CVL system (including objectives for service frequency, journey connectivity and quality standards, such as accessibility), it has also taken equal care not to be over-prescriptive. Bidders are free to determine their preferred technology solution.
Giving the ODP responsibility for development and delivery management of the CVL transformation will integrate the system change with its operation. This embedded level of integration is expected to deliver cost, quality, programme and risk mitigation benefits for all parties, and is likely to set a new benchmark for devolved management of rail systems.
To ensure early delivery of transformation benefits, in parallel with the ODP contract, TfW is also procuring a framework of Infrastructure Delivery Partners. This framework will be available to the ODP on contract award.
Transfer of the CVL system from Network Rail ownership to TfW enables the integration of operations, maintenance and transformation, offering significant benefits. It paves the way for a system technically segregated from the national rail network, allowing application of alternative technologies and freedom to develop standards for design, construction and maintenance that, while remaining compliant with regulatory obligations, will deliver benefits through the whole life cycle of the asset system.
The ODP contract will be underpinned by public funding support, including a European Regional Development Fund grant. An allocation of the UK national government’s rail services budget will be transferred to the Welsh Government.
The new Wales and Borders and South Wales Metro Rail Services contract is set to showcase a new approach to procuring and delivering rail services, and to serve as a benchmark for the industry at a time when there is increasing interest in devolving control of rail services from national government.
Steer, as an integral part of TfW’s advisory team for the ODP procurement, has been supporting TfW in many areas, including funding discussions, shaping the service requirements, working towards the required regulatory approvals and developing the strategy for TfW to lead all aspects of the asset management of the system.
Written by Andy Collinson.
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