Railway Industry Association

25 March 2010

The Railway Supply Industry:Where Next?

Jeremy Candfield

Director General

Railway Industry Association

The Railway Industry Association - RIA

• The trade association for the UK railway supply industry

• Representing and promoting the industry’s interests to Government and major clients

• c160 member companies• Who supply national rail, LU, light rail, exports• Includes great bulk of sector by turnover• And who are very diverse:

Railway Industry Association

RIA Members include:

• Passenger train manufacturers/systems integrators• All major signalling and most major telecomms firms• All Track Renewal Contractors• ROSCOs• Major suppliers and other contractors• Component manufacturers• Numerous consultants and specialist service providers• Companies of all sizes:

Railway Industry Association

3M CPPD ABB Ltd Adaptaflex Ltd AECOM Aerco Ltd Airscrew Ltd Alan Dick UK Ltd Alcatel-Lucent Telecom Ltd ALSTOM Transport Amey Infrastructure Services Anixter (UK) Ltd Ansaldo STS UK Ltd Arthur D Little Ltd Arup Aspire Rail Atkins Atlas Rail Components Babcock Rail Balfour Beatty Rail Infra. Services Ltd Balfour Beatty Rail Ltd Balfour Beatty Rail Projects Ltd Balfour Beatty Rail Technologies Ltd Balfour Beatty Rail Track Systems Ltd Bingham Rail BMAC Ltd BMT Fleet Technology Ltd Bombardier Transportation UK Ltd Bovis Lend Lease Consulting Brecknell, Willis & Co Ltd Bridgeway Consulting BT Global Services Cable & Wireless UK Carillion Rail CDSRail Cembre Ltd CMS Cameron McKenna Colas Rail Ltd Collis Engineering Ltd Comply Serve Ltd

Correl Rail Ltd Corus Cogifer Switches & Crossings Corus Rail Products Corus Railway Infrastructure Services CSE International Ltd DeltaRail Group Ltd Design & Projects Int Ltd DuPont (UK) Ltd EDF Energy Contracting Ltd EMEG Electrical Ltd Engineering Support Group Ltd Enotrac UK Ltd ESR Technology Faiveley Transport Birkenhead Findlay Irvine Ltd Flexicon Ltd FLI Products Frankham Consultancy Group Frazer-Nash Consultancy Ltd Fugro Aperio Ltd Funkwerk IT York Ltd Gardiner & Theobald GE Transportation Systems Ltd Gifford LLP Glenair UK Ltd Graybar Ltd Halcrow Group Limited Harsco Track Technologies Hima-Sella Ltd HSBC Rail (UK) Ltd Huber+Suhner UK Ltd Hyder Consulting Limited IAD Rail Systems Independent Glass Company Ltd Invensys Rail Group Jacobs UK Ltd Jafco Tools Ltd Jarvis Rail Kaba (UK) Ltd

KeTech Ltd Kilfrost Ltd Knorr-Bremse Rail Systems (UK) Ltd Lloyd's Register Rail Ltd LML Products Ltd LPA Group Plc Martek Power Ltd Matisa (UK) Ltd May Gurney Rail (Signalling) McKenzie Martyn Partnership McML Systems UK Ltd Mechan Ltd MGB Signalling Morgan Est ETI Mott MacDonald Group MPEC Technology Ltd Neway Training Solutions Ltd Nichols Group Ltd Omnicom Engineering Ltd Pandrol Ltd Park Signalling Limited Parker Hannifin plc Parsons Brinckerhoff Ltd Parsons Transport Group Pennant International Group plc Plasser UK PMProfessional Learning Portec Rail Group (UK) Praxis HIS QHI-Rail Ltd QinetiQ R Bance & Co R S Clare & Co Ltd Rail Tech Group Ltd Rail Training International Ltd Railway Approvals Ltd Railway Projects Ltd Ricardo UK Romac Technical Services

Rowe Hankins Components Ltd RTS Solutions Ltd Saft Ltd Schneider Electric ScrewFast Foundations Ltd SEA (Group) Ltd Serco Assurance Sersa (UK) Ltd Siemens Transportation Systems Sigma Coachair Group UK Ltd Signal House Ltd Signalling Solutions Ltd SITEC SPX Rail Systems SRS Rail System Ltd Strainstall Ltd SW Global Resourcing Lrd Systra Telent Technology Services Ltd Temple Group Thales UK Touchstone Renard Trakside Systems Ltd Translec Ltd Tritech Rail Ltd TTCI (UK) Ltd TUV Product Service Ultra Electronics PMES Ltd Unipart Rail VMSL Voith Turbo VolkerRail Webro Cable & Connectors Ltd Westcode (UK) Ltd Yellow Rail Ltd York EMC Services Ltd Zonegreen

RIA Members – February 2010

Railway Industry Association

RIA

• Works closely with DfT, NR and UKTI, plus ORR, RSSB etc

• And increasingly with BIS and LUL• Seeking to identify and foster areas of common interest,

i.e. constructive engagement e.g:– Founded and promotes the Value Improvement

Programme to drive out waste– Major contributor to TSAG– Lead promoter of the National Skills Academy for

Railway Engineering, just approved• Does not claim that anyone has a right to workload

While supply companies

• Deliver virtually all of Network Rail’s renewals and enhancement programmes

• Deliver all new rolling stock, most refurbishment, much r/s maintenance

• Are significant exporters, especially of consultancy, high-tech components, contracting

• Employ 40% of the railway industry labour force:

Railway Industry Association

Railway Industry Association

Size of the UK Rail Industry

Employees, estimated

Total Industry, at least 190,000

Operators (TOCs/FOCs) 60,000

Network Rail 36,000

London Underground 19,000

Supply Industry 75,000

So supply is about 40% of the industry

(HS2 Cmnd Paper)

Railway Industry Association

Members:

• Are competitive, used to working in the world’s most open railway market

• Are often in international ownership• Want to compete vigorously against more consistent

demand allowing them to offer best value for money to their clients

• But instead experience the damage caused by irregular and unpredictable ordering:

– inhibits investment and training– forces inefficient use of resources and waste

Railway Industry Association

First franchiseslet - 1996

Railways Act 1993

Passenger rolling stock orders placed

EMU/DMU orders for mainline railways by BR/TOCs

Future Promised Train Builds:

200 DMUs

1300 HLOS

Thameslink

IEP

Railway Industry Association

/?

delayed

?leaving supply

chains in a vacuum

Railway Industry Association

NR Electrification Chart

NR presentation to RIA contractors January 2010

Risk and Waste

• Supplier MDs are paid to use their professional experience to make judgement calls against uncertainty

• They expect to compete and do so• But it is pointless, and very expensive, to make them

take risks that are controlled by the client• And they see much waste in the system• Both sides need, at least, more dialogue, and closer

understanding of how each impacts on the other

Railway Industry Association

Welcome recognition in the HS2 Command Paper Ch 12

• “Government needs to start working now to secure a strong and competitive supply chain”

• Working with the supply chain to enable companies to plan ahead

• A supply chain forum• An industrial strategy• Procurement that works for Government and industry

alike• Adoption of the Sustainable Development principles

Railway Industry Association

Potentially very important

• To securing– Best value– Optimised life cycle cost, including maintenance– A sustainable industry– Continuing to create value in the economy– And enhanced exports potential from a stronger

base.

But we have a long way to go!

Railway Industry Association