Intercity Express Programme
We helped Agility Trains and Hitachi Rail Europe determine a comprehensive operational interfacing regime that enabled them to commit confidently to their stringent performance obligations and to satisfy their financiers that they were able to deliver reliably on such commitment.
Overview – In 2007 the Department for Transport (DfT) issued an invitation to tender under the Intercity Express Programme (IEP) for the design, build and daily provision for service of a fleet of new high speed trains. Hitachi Rail Europe (HRE) is the main shareholder, along with John Laing, in the Agility Trains consortium (Agility), which was awarded the £5.7bn contract. Agility is required to manufacture and introduce into service 866 new rail vehicles and to overhaul, maintain, clean and present them for daily service over a 27.5 year term. Since April 2008 IPEX has provided a supporting role to Agility and HRE in the bid preparation, contractualisation and mobilisation activities, particularly in helping to ensure that the commercial mechanisms in the contract truly support the real-life practical depot and maintenance operations.
The performance obligations under the contract are especially stringent and require the practical working arrangements and the depot capabilities to be particularly carefully defined. Challenging obligations placed upon Agility and passed through to HRE required corresponding counter obligations upon the Operator to be determined and defined and, accordingly, the operational interfacing regime between Agility (and hence HRE) and the Operator was highly constrained contractually, to a degree not normally seen in train service provision contracts. As the detailed practical working arrangements became linked more strictly to the commercial terms within the contract Agility and HRE needed some help to determine and manage the appropriate linkage and ensure that the commercial mechanisms in the contract truly supported the real-life practical depot and maintenance operations, whilst protecting the flexibility that the Operator required as well as HRE’s vital access to the fleet for delivering cleaning and maintenance.
Having already helped HRE with the preparation of the original depot and maintenance bid elements IPEX willingly accepted ownership for Agility and HRE of the operational interfacing regime – referred to as Rules of the Fleet (RoF) and Rules of the Depot (RoD). IPEX was able to apply a combination of a sound grasp of the commercial requirements and imperatives coupled with extensive railway operational and maintenance experience and knowledge. Through an exhaustive process of constructing metrics, rules and appropriate variables compatible with the emerging HRE rolling stock maintenance regime and the proposed depot designs, assembling into draft contract schedules for the Agility and HRE maintenance, legal and commercial teams, and negotiating with the client (DfT) IPEX led the development of the RoF / RoD operational interfacing regime for the contract. IPEX also used the regime to help HRE’s depot design and build contractor to verify the capacity and capabilities of the depot designs for delivering the performance obligations in train service contract.
The role fulfilled by IPEX in developing and articulating a comprehensive RoF / RoD operational interfacing regime ensured that DfT, the Operator and the Agility and HRE maintenance, legal and commercial teams were working off a common understanding of the arrangements – arrangements which could be contractualised as well as being operated in practice. The RoF / RoD regime also enabled HRE to verify that the depot designs could be depended upon to support the delivery of their obligations. For Agility and HRE the crucial IPEX value was in determining a comprehensive regime that enabled them to commit confidently to their stringent performance obligations and to satisfy their financiers that they were able to deliver reliably on such commitment.