Mayor has further plans for ‘London Overground’

by The Times 100 on Monday 26th November, 2007

Mayor has further plans for 'London Overground'

The Mayor of London, Ken Livingstone, plans to submit a bid to take over most of the biggest train franchises (Southern) from 2009.In addition, he is planning to take control of all commuter trains that terminate in London, including those starting well beyond Greater London.The mayor's overall plan is to introduce a unified ticketing system for the entire London commuter network, ending current confusion over the different restrictions and pricing policies set by 14 train companies.It is also planned that Pay-as-you-go Oyster cards will be accepted on all the routes. (The Times -20 November 2007).

These plans would reverse the right of privatised rail companies to set open and off-peak fares and to keep the profits.However, although publicly the Government appears committed to keeping the current franchising system, it is believed that ministers privately feel that the mayor's model could be a better structure for the rail industry long term (The Times -20 November 2007).

Transport for London (TfL) has already taken control of three lines and rebranded them as London Overground, and the extended East London line will become part of TfL when it reopens in 2010 (The Times -20 November 2007).TfL will own the stations and trains but services will be run by London Overground Rail Operations Limited (Lorol) which is jointly owned by Hong Kong firm MTR and construction firm Laing and has a seven year contract with TfL(BBC Online - 11 November 2007).

Brian Cooke, Chairman of London TravelWatch said: “The network would be much easier to use if it was run by one organisation under a single set of rules.If London Overground proves a success in the next year, it will provide a powerful argument for reintegrating the network”.(The Times -20 November 2007).

Look at two Times 100 case studies on Network Rail, the company set up by the government to look after the infrastructure of the railways.It does not operate for profit, but tries to add value to the railway system. Its strategy involves trying to reach this objective within the context of the external factors that will affect it.This case study highlights the importance of planning for major projects and how using Critical Path Analysis contributes to efficient and effective use of resources.

Sources:

The Times 100 Edition 12 Case Study – Network Rail, Using Pestel to design effective strategies

The Times 100 Edition 12 Case Study – Network Rail, Critical path analysis at Network Rail

The Times Online – Transport for London prepares to go Overground, 6 September 2007

London mayor plans to take public control of rail services – The Times (print edition), 20 November 2007

BBC News – London Overground service begins – 11 November 2007

Potential Study Questions:

  • Assess the use of Critical Path Analysis in planning large scale development projects.
  • Carry out a PESTEL analysis listing what issues you think Transport for London might have considered in their planning for London Overground.
  • For economists: With reference to the concept of natural monopoly, evaluate the proposal put forward by Ken Livingston.

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