"End French and German Dominance of UK Railways" (Telegraph Article)

[LNW-GW Joint]

The Telegraph has a piece which reports the ORR has told Network Rail to award signalling contracts to competitors rather than the EU majors (Alstom and Siemens).
It doesn't mention Hitachi which is another major (foreign) signalling supplier, though the piece has an irrelevant illustration of a GWR Hitachi IET.

Does the ORR not know that the UK native signalling capability has over the years since privatisation been bought by the above majors?
UK owners had every chance of acquiring that capability, but the technology, like rolling stock design and production, has largely migrated out of the UK.
In any case UK signalling projects end up being delivered from places like Chippenham and Reading, because the UK-specific content is usually quite large.
My perception is that the 3 majors have quite large technical design and delivery teams in the UK, retaining IPR and know-how.
So what is the ORR trying to achieve (if the report is true).
Can anyone name an ETCS supplier other than the 3 majors?

End French and German dominance of UK railways, watchdog demands (msn.com)

The Office of Rail and Road (ORR), the industry regulator, has told public sector body Network Rail to reduce its dependency on French firm Alstom and German conglomerate Siemens.
The two firms account for 90pc of the taxpayer spend on upgrading signalling. A total of 26,000 signals need to be upgraded over the next 15 years, meaning the pair are in line to share between £800m-£900m annually unless Network Rail changes its procurement processes.
Siemens ranks among one of Germany’s biggest companies, with a market value of €125bn, and provides a raft of engineering services for the British Railways. Alstom, worth €11.7bn, also owns Bombardier’s rail business.

The ORR said Network Rail should be “rewarding pro-competitive behaviour”.
The regulator also hinted that the public sector body had been awarding lucrative contracts to the two European firms to the detriment of smaller engineering companies. Network Rail should ensure “procurement processes are run on genuinely competitive terms and do not unduly favour existing suppliers”, the ORR said.

 

[D365]

Atkins is owned by SNC-Lavalin (Canadian), Thales is about to be purchased by Hitachi. What other options are there?

As you point out, Chippenham and Reading are the centres for UK signalling delivery.

 

[AlexNL]

What other options are there?

CAF have a Signalling business, which is experienced with interlocking, lineside signalling and trainborne equipment. No UK experience though, other than delivering the equipment in the Class 195 (and I presume 196+197).

 

[yorksrob]

I'm afraid that's where laissez-faire free market dogma gets you.

 

[HSTEd]

Well about 25 years too late for that - this situation became inevitable once privatisation occurred......

 

[LNW-GW Joint]

GEC didn't have to sell its rail interests (which included signalling as well as rolling stock) to Alstom, but it did.
It could have been a UK rail champion (as Alstom is in France), but they thought there was more money in telecoms and defence contracts.

 

[The Planner]

Probably due to the fact they rinse NR for every penny they can knowing they can't/don't go anywhere else.

 

[kevconnor]

Would it be right to say the recommendation from ORR is focused on being overly reliant on two companies, which happen to be French and German? But this has been picked up by the Torygraph to be spun into Euro bashing focused more on the origin of the companies.

 

[MarkyT]

The UK and wider European signalling market was one of the reasons why the proposed merger between Siemens and Alstom rail businesses was criticised so heavily and abandoned. Even the old US/UK Vaughan Harmon business is owned by Alstom today.

 

[AngusH]

Would it be right to say the recommendation from ORR is focused on being overly reliant on two companies, which happen to be French and German? But this has been picked up by the Torygraph to be spun into Euro bashing focused more on the origin of the companies.

I agree. If you edit the text slightly you get:

The Office of Rail and Road (ORR), the industry regulator, has told public sector body Network Rail to reduce its dependency on Alstom and Siemens. The two firms account for 90pc of the taxpayer spend on upgrading signalling.

Which could be a valid position even if both are based next door.

 

[Ediswan]

Possibly another example of dodgy journalism. The meat of the article is about avoiding favouring existing suppliers. Based on what is actually quoted from the ORR, there is no direction to prefer UK suppliers as an alternative. Not even a 'demand' that there be a change of suppliers. But 'End French and German dominance ..." makes a better headline.

I have not managed to find the original ORR statement.

 

[Tim M]

When I moved from GEC-General Signal (owned by GRS from the USA and GEC in the U.K.) to Westinghouse (part of Hawker Siddeley) in 1986 they were reasonably independent of European involvement, although then as now Westinghouse were partnered with Dimetronic in Spain, Westinghouse Australia and Safetran Systems in the USA. Since then GEC-GS has become part of Alstom, and Westinghouse part of Siemens by way of BTR and Invensys.

However delivery Contracts are still run out of U.K. offices even if some of the products are designed and/or manufactured elsewhere. When BTR took over Westinghouse about twenty odd years ago, Siemens was within two weeks of buying the company as they wanted a slice of the U.K. business. Note also although Siemens have sold their German products in the U.K. they haven’t really caught on, I believe however the Germans may have taken to using the WESTRACE computer based interlocking.

The desire to use other suppliers is not new and started when BR was privatised and Railtrack tried Ansaldo, Siemens and GE, but with limited success. What politicians (and I get a whiff of Brexit in this) don’t realise is the depth of knowledge in project delivery which remains almost exclusively old school GEC and Westinghouse plus the former BR design offices sold off at privatisation.

I’ve was involved in export work for many years including Scandinavia and the Far East (I’ve been happily retired for eight years) and breaking into the European market is difficult. The converse is also true which is why Alstom and Siemens have bought into the NR market rather than trying to sell direct from France and Germany. Crossrail is a good example where Siemens were lead contractor (before buying Invensys Rail) but sub-contracted the interlocking (WESTRACE) to Chippenham including the interfaces to existing NR signalling.

Altogether it’s complicated, it will be interesting to see if the ORR get their wish. Realistically it might only happen if Alstom and Siemens sell their U.K. businesses, and I can’t see that happening.

 

[Domh245]

I have not managed to find the original ORR statement.

Rail regulator sets sights on boosting competition, innovation and value for money in railway signalling | Office of Rail and Road

The current signalling market in Great Britain is valued at £800-900 million per year. As Britain’s railway infrastructure undergoes one of the most significant modernisation programmes in its history as it increasingly adopts digital technology, the market is expected to expand significantly.

www.orr.gov.uk

Rail regulator sets sights on boosting competition, innovation and value for money in railway signalling​

8 November 2021
The Office of Rail and Road (ORR) has today published recommendations aimed at opening up the railway signalling market in a package of measures that would allow Network Rail to boost competition between suppliers on cost, quality and innovation, and drive greater efficiency and performance across the network.

The current signalling market in Great Britain is valued at £800-900 million per year. As Britain’s railway infrastructure undergoes one of the most significant modernisation programmes in its history as it increasingly adopts digital technology, the market is expected to expand significantly.
For change on this scale to be delivered affordably, Network Rail as the main buyer of signalling systems needs to transform its approach to procuring and delivering signalling projects.

ORR has found that the current market is not competitive enough; with too few suppliers, high costs and Network Rail not having the procurement practices in place to benefit from its considerable buyer power. As a result, ORR has made a number of recommendations aimed at attracting more suppliers to the market, in order to stimulate competition and achieve better value for money when procuring signalling equipment. These include:

• A new approach to procurement aimed at rewarding pro-competitive behaviour, widening the pool of suppliers, and reducing Network Rail’s dependency on incumbent suppliers.
• Ensuring Network Rail’s procurement processes are run on genuinely competitive terms and do not unduly favour existing suppliers or penalise ‘first movers’ in new technology.
• Providing suppliers with greater certainty in the volumes of work awarded to them and reducing the risk when developing new technologies.

John Larkinson, Chief Executive, ORR said:
Components
“There are more than 40,000 signals on the mainline network, with 65% of these needing to be renewed within the next 15 years – and essentially there are only two main players in the GB market for major signalling projects, namely Siemens and Alstom, who account for over 90% of Network Rail’s major signalling spend.

“The shift from conventional to digital signalling systems has the potential to revolutionise the way the railway operates, delivering transformative improvements to increase capacity, lower unit costs, and reduce disruption.
“Our recommendations set out how Network Rail can reduce reliance on the dominant suppliers, and make the market more attractive to potential new suppliers by increasing suppliers’ confidence in the market and reducing costs.”
ORR highlights continued cooperation and engagement from Network Rail, particularly in the regions, as the key to success for these recommendations and ORR has asked for Network Rail to submit, no later than three months from the publication of this report, a strategy and plan setting out how it intends to implement the findings and recommendations.



Notes to Editors

1. Signalling market study
2. The Digital Rail programme is a cross-industry plan to accelerate the transition to digitally run railways in order to increase rail capacity and improve network performance sustainably and safely.
3. The Office of Rail and Road (“ORR”) is the independent economic and safety regulator for the railways in Great Britain, and the monitor of performance and efficiency for national highways and trunk roads.
4. We are also a competition authority with powers held concurrently with the CMA to apply competition enforcement and markets powers in matters relating to the supply of services relating to railways.

 

[hwl]

I agree. If you edit the text slightly you get:


Which could be a valid position even if both are based next door.

The European commission has also said similarly previously. ETCS was/is one of their hopes a big hopes in some areas of signalling (not interlocking...)

 

[AlexNL]

ETCS was/is one of their hopes a big hopes in some areas of signalling (not interlocking...)

The interlocking is something the various infrastructure managers are working on, via the EULYNX project.

 

[30907]

Rail regulator sets sights on boosting competition, innovation and value for money in railway signalling | Office of Rail and Road

The current signalling market in Great Britain is valued at £800-900 million per year. As Britain’s railway infrastructure undergoes one of the most significant modernisation programmes in its history as it increasingly adopts digital technology, the market is expected to expand significantly.

www.orr.gov.uk

Which confirms that the European angle was DT spin. Why am I not surprised?

 

[Bald Rick]

I think the thread title needs amending, as the ORR didn’t say that...

 

[kevconnor]

The ORR article is more about Network Rail adopting behaviours that will encourage new entrants and innovation. Are there any modern examples where other providers have been able to be successfully involved? My limited knowledge, when mentioned above about Ansalado, is that it has been problematic in the Stockport area since it was installed.

 

[MarkyT]

The ORR article is more about Network Rail adopting behaviours that will encourage new entrants and innovation. Are there any modern examples where other providers have been able to be successfully involved? My limited knowledge, when mentioned above about Ansalado, is that it has been problematic in the Stockport area since it was installed.

Italian Ansaldo were part of a Railtrack initiative to bring in new entrants along with Adtranz using their Swedish/Norwegian products and first time around Siemens with their German equipment. American GETS were also involved around the time with Vaughan Harmon products. Adtranz Ebilock was eventually abandoned on Horsham in favour of SSI (Alstom I think), Siemens, with their cable intensive SIMIS did two schemes in Wessex & then lost their framework contract and withdrew from UK, but soon reappeared by fulfilling their previous ambition of buying the former Westinghouse signalling business from Invensys, with all its UK experience, including some privatised ex BR drawing offices by then. Adtranz got out of UK signalling, closing or offloading the former BR drawing offices it had bought, before the train manufacturing business was acquired by Bombardier I think. Vaughan Harmon/GETS product lines have developed further but are now in the Alstom stable. Thales, of TPWS fame and heavily involved with TfL CBTC projects, has recently been taken over by Hitachi I understand. So the market diversification project resulted in a handful of now non standard installations that still exist but were not repeated, despite a huge amount of work by engineers and consultants to customise and certify them for UK use. Meanwhile the supply base has continued to consolidate, worldwide.

 

[Tim M]

So the market diversification project resulted in a handful of now non standard installations that still exist but were not repeated, despite a huge amount of work by engineers and consultants to customise and certify them for UK use. Meanwhile the supply base has continued to consolidate, worldwide.

Part of the issue is the finite availability of skilled and knowledgeable engineers, something that is hardly a new problem. In the 1970’s and 1980’s BR recognised this and used the ‘Allocated Contract’ process for major schemes. Westinghouse picked up Warrington to Carlisle the London Bridge, Doncaster and Bed-Pan, GEC having Scottish jobs Motherwell, Glasgow Central and Edinburgh and also Victoria (I was involved with latter two). I’m not sure how Contracts are managed in 2021 but before I retired processes not dissimilar to ‘Allocated Contracts’ were used, recognising the finite resource availability.

Before I retired NR (if they were sensible) didn’t just look at the bottom line but also at resource availability. Today all staff working on safety critical design, installation and testing require an appropriate IRSE Licence. A new entrant into the business will need to employ Licensed engineers either by poaching from other organisations or training new recruits. Except the latter won’t work as proven experience (competence) is core to the Licensing scheme.

Maybe NR needs to take back all the offices that were sold off at privatisation some twenty odd years ago. After all that time they wouldn’t find many staff left who worked for BR.

 

[HSTEd]

Ultimately consolidation is inevitable - the only way to prevent a single supplier situation causing serious problems would just be to have an in house signalling development and design group.

But that is an anathema in the modern era.

 

[Bald Rick]

Ultimately consolidation is inevitable - the only way to prevent a single supplier situation causing serious problems would just be to have an in house signalling development and design group.

But that is an anathema in the modern era.

NR has an in house signalling development and design group.

 

[MarkyT]

NR has an in house signalling development and design group.

Very true, but not at the scale to tackle the fine manufacturing detail of large schemes entirely in-house, and NR own very little of the technology hardware intellectual property of interlocking and trackside systems. Certain services always have to be contracted out although it's fantastic that they have their own engineers coordinating activities. I hope this good practice survives into GBR.