Swot Analysis of Network Rail

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SWOT Analysis

Network Rail took over ownership by buying Railtrack plc, which was in railway administration, from the Railtrack Group plc for £500 million in 2002. Railtrack had become subject to broad-based and persistent criticism, notably over cost escalations and delays with the West Coast Main Line modernisation and the circumstances surrounding accidents at Southall (1997), Ladbroke Grove (1999) and Hatfield (2000). After these incidents Railtrack’s cost spiralled out of control, to remedy this situation which would ultimately lend to the company collapsing and being purchased by the government. By purchasing Railtrack when the company was being heavily criticised and by renaming it Network Rail it was seen as a favourable action because Railrack was in such a bad state it could only improve by being taken over.

Network Rail are currently investing £800 million into the railway tracks every to improve and maintain the tracks, in 2006 alone the company spent £3 billion on engineering projects improving stations, track and the efficiency of the railway industry. The company has also used this money to acquire state-of-the-art technology and invest large amounts of money in machinery such as ballast cleaners, the high-output train and track-relaying train. Spending this amount of money on the railway shows current and potential passengers that the company is very dedicated to maintaining and improving the railway and the services they provide.

During the Christmas period of 2007 Network Rail planned maintenance to take place whilst passenger levels would be low with the expectation of the work being complete by New Years Eve. However this maintenance work got delayed and passengers were advised to check travelling schedules before attempting the go to their destination. The delays lasted for a total of 3 days and the service resumed to normal on 2nd January 2008. These delays heavily affected passengers as well as operating companies such as Virgin trains as 50,000 people had booked tickets to travel on 31st January. By not informing the operating companies of the maintenance work they had planned for the holiday period they have damaged their relationship with the operating companies. They have also damaged their relationship with passengers as the delays hindered them from getting to spend the holiday period with their families.

The derailments which occurred at Grayrigg, Potters Bar and Epsom have affected the reputation of Network Rail as they have accepted responsibility for the incidents. As a result of this the Rail Accident Investigation Branch (RAIB) are currently conducting an investigation in to the incident and criminal charges may be brought. In the eyes of the public these incidents may bring back memories of the accidents at Southall, Ladbroke Grove and Hatfield and the public may begin to question the maintenance work which is being carried out on the railways.

Network Rail announced at the beginning of 2008 that they would be raising train ticket fares. The regulated fares which included season tickets increased by an average of 4.8% and many unregulated fares were set to rise by much more. The increase in ticket prices did not go down well with consumer groups who said the rises were unjustified, but train operators claimed the rises were needed to improve the railway and its services. Opportunities:

Network Rail has the opportunity to transform Britain’s railway. They are trying to do this with their current projects such as:

Providing faster journeys between London, Manchester and Glasgow - Investing into the UK’s busiest railway line, the West Coast. In the last two years the London-Manchester journey time has come down by over 30 minutes. Vital work continues in 2008 to reduce the bottleneck at Trent Valley and to improve capacity through Rugby and Nuneaton.

Improving communications between train drivers and signallers - Investing £1.2 billion in...
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