The Office of Rail and Road has warned that inconsistent planning, weak benchmarking and fragmented lessons learned processes continue to drive avoidable cost and schedule overruns across Britain’s major rail renewals programmes, despite Network Rail demonstrating broadly mature governance arrangements.
In a newly published review, published online on 1st May, comparing how Network Rail and National Highways manage large renewal schemes, consultants CPCS and Croftstone concluded that both organisations operate at a “Managing” maturity level rather than achieving “Optimal” performance. The report examined governance, estimating, risk management and efficiency across major infrastructure renewals.
For the rail sector, the findings amount to a clear call for tighter controls over early-stage planning and greater consistency in how projects are developed across regions and programmes.
The report found that Network Rail’s governance structure is generally robust. Its PACE framework, described as a “triple-lock” system combining project, financial and procurement approvals, was praised for being well understood and consistently applied across the organisation.
Risk management was also highlighted as a relative strength. The review pointed to Network Rail’s use of the Active Risk Manager system and cited Scotland’s regional retained risk fund as an example of strong portfolio-level governance. Under that approach, half of each project’s risk allocation is pooled into a centrally controlled reserve that can only be released through formal governance approval.
The review noted that Scotland now records the lowest signalling renewal rates across Network Rail’s regions, suggesting that more disciplined portfolio-level risk management is helping to improve delivery performance.
However, the report also identified several structural weaknesses that rail companies, contractors and supply chain partners will recognise immediately.
One of the most significant findings concerns benchmarking and forecasting. While Network Rail uses benchmark rates and collaborative planning during early-stage estimating, the report found that lessons learned are not consistently synthesised at portfolio level. This limits the organisation’s ability to understand why estimates change as schemes progress through development and design stages.
The consultants concluded that early optimism, scope change and inconsistent benchmarking remain among the primary drivers of cost escalation and schedule movement.
For rail companies involved in major renewals, the implication is straightforward: better governance alone will not stabilise delivery if early estimates continue to be based on incomplete or inconsistent data.
The report also highlighted engineering access as a major cost driver for rail renewals. Case studies from the West Coast North Modernisation Programme demonstrated that bundling track, signalling and overhead line work together can significantly reduce mobilisation costs, possession management costs and Schedule 4 compensation exposure.
The review said these efficiencies are real but are not yet applied consistently across the network. It recommended that Network Rail formally document and standardise best practice around bundling and engineering access planning.
That finding will resonate with Tier 1 contractors and delivery partners, many of whom have argued for years that fragmented renewals planning creates unnecessary repeat possessions, duplicated mobilisation and avoidable disruption.
Another key issue identified by the ORR review is data quality.
The consultants found that fragmented data entry practices and inconsistent reporting standards limit Network Rail’s ability to compare performance across regions and identify emerging trends.
The report recommends moving away from regionally managed spreadsheets towards a more centralised renewals database with standardised templates and validation rules.
For suppliers and programme teams, this reflects a broader industry shift towards evidence-led portfolio management. Increasingly, infrastructure clients are expected not only to deliver projects, but also to demonstrate measurable efficiency gains across entire workbanks.
The ORR review also points to a growing expectation that whole-life cost considerations should play a bigger role in renewal decisions.
The consultants noted that National Highways currently requires quantified whole-life cost impacts within governance documentation, whereas Network Rail’s process relies more heavily on a simple confirmation that whole-life costs have been considered.
The report argues that rail renewals governance should move beyond compliance-style declarations and instead require clearer evidence of how asset performance, deferred renewals and future maintenance liabilities are being evaluated during early-stage planning.
Cross-sector comparisons formed another important part of the study. The review found that Network Rail and National Highways are more mature than many North American transport agencies, particularly in portfolio management and regulatory oversight.
Even so, the report suggests the rail sector could learn from utilities and water companies, where independent assurance, probabilistic forecasting and external cost reviews are more deeply embedded in project development.
One of the strongest recommendations is for both Network Rail and National Highways to establish joint knowledge-sharing frameworks and six-monthly compliance reviews covering at least 75% of regional delivery activity.
The review also proposes a bi-annual cross-sector forum involving organisations such as Transport for London and utility companies to improve the sharing of lessons learned and best practice.
For the rail supply chain, the report’s broader message is less about introducing new governance structures and more about consistency, discipline and transparency.
The ORR’s findings suggest that the next phase of improvement in rail renewals will depend less on inventing new processes and more on applying existing ones rigorously across regions, integrating live delivery data into forecasting, and creating stronger feedback loops between projects, programmes and portfolios.
In practical terms, rail companies that can demonstrate stronger benchmarking, clearer change control, better engineering access planning and more mature data governance are likely to be better positioned as the sector faces continued pressure to deliver renewals more efficiently, with greater certainty and less disruption.
