An afternoon with Parliament’s Transport Select Committee

When Gwyneth Dunwoody chaired Parliament’s Transport Select Committee she used to favour the rooms along an upstairs corridor in the Houses of Parliament themselves.

These rooms were cramped and they were hot in summer. Witnesses, journalists and visitors, perhaps even MPs too, would sweat as Dunwoody probed and questioned through a sticky, summer afternoon.

Thankfully, today’s chairman, Louise Ellman, favours the air-conditioned comfort of Portcullis House and so it was on Monday 9 June that a handful of MPs and others gathered in the Grimond Room to hear Mark Carne answer questions.

It was the Network Rail chief executive’s first appearance and I reckon he got the better of his inquisitors. He wasn’t knocked off balance by any of the questions and by the end of the session Louise had lost six of her committee who upped-sticks at various points through the 75-minute quiz.

Norwich North MP Chloe Smith opened a line of questioning about the performance of contractors and NR’s confidence in them in the light of a recent engineering overrun at Colchester. It elicited a response about NR’s move towards longer-term alliances and better investment in people. It’s a shame there was no follow-up question about contractors’ skills shortages, particularly in signalling and overhead line engineering because both are areas in which NR has large volumes of work planned over the next five years.

Carne spoke also of the need to work closely with train operators and his view that more work should be done in long blockades rather than piecemeal over weekends and nights. This is an area the MPs would have done well to probe in more detail. None appeared to know the saga of Watford Junction’s track and signalling renewals.

NR announced last summer that Watford Junction would close for 16 days over 9-25 August in a move that would sever the key West Coast Main Line (albeit during the slightly quieter summer holidays). This would then be followed by work over Christmas, over 14-22 February 2015 and 3-6 April 2015 (Easter). When this plan was revealed, no-one I asked could explain how services and passengers would work around the blockade.

It struck me that the announcement had come before the plan was properly worked through and probably before train operators had agreed to it. This feeling was reinforced when NR subsequently dropped the long blockade in favour of three weekends of work in August, followed by Christmas, Easter and two further weekends.

So Carne’s words about moving more towards work in blockades and closer liaison with train operators were open to challenge, had the Transport Committee members been suitably well-informed. (As an aside, the Office of Rail Regulation said way back in June 2008: “Network Rail believes – and we and the industry agree – that its strategy of depending so heavily on long possessions is no longer acceptable. Users need a railway which better meets customer requirements for travelling at weekends and late in the evening.”)

The MPs also appeared confused about the difference between emergency repairs and planned improvements. Why, asked Jason McCartney, could money not be found to remove bottlenecks on the network in the same way money was found to repair Dawlish (where the track and sea wall was washed away in last winter’s storms). “Are you able to do it with other projects?” he asked.

Carne had already explained that half of the money to repair Dawlish has come from insurance and the other half from NR resources. He had also explained that it’s government that decides where to make improvements from options drawn up by NR, having decided how much it’s willing to spend on railways.

“We can’t de-bottleneck a complete railway line and change our five-year investment plans because we’ve had one series of particular issues,” Carne said.

NR’s chief executive had earlier told MPs that his company was modelled on ordinary FTSE companies when it came to its governance, that is, he reported to the chairman and there was an overall board of executive and non-executive directors.

All true of course but NR is also a not-for-profit company created by the government and from September, it’s debts will count as government debts. So having modelled itself on a FTSE company, it can’t complain at the headlines that followed its Annual Report publication later that same week. According to Engineering and Technology Magazine it was ‘Network Rail profits soar as punctuality falls’.

Yet NR’s income and spending is regulated and so the concept of profits is rather flawed in this context. NR explained its 86% increase in profits after tax to £1,256 million as the result of “accounting gains on hedging instruments” (£304m) and a tax credit of £221m (up from a tax charge of £70m the year before).

The annual report revealed that performance had fallen from 90.9% to 90% which the company explained as being the result of a million more train services running each year compared with a decade ago. That may well be the case but NR has also seen its network hugely improved to cope with this increase in trains.

NR missed its five-year long-distance targets last April, managing 86.9% instead of the required 92.0%. It should find the next five years easier, having convinced the Office of Rail Regulation to scale back its target for 2014-19 to 88% public performance measure (PPM) for East Coast, Virgin West Coast and First Great Western’s long-distance trains. The overall target to be reached for all trains by March 2019 is 92.5% on time.

I had a flashback to Iain Coucher’s time running Network Rail when Carne deflected MPs’ questions about NR’s governance and structure by asking: “What’s broken? What needs to change?” This was exactly Coucher’s line when he answered similar questions and yet since then, the railway has seen McNulty’s major report about costs and reform and then the formation of the Rail Delivery Group to combat the feeling that the railway was not joined-up.

 

Nationalisation? I’m not convinced

Calls over the early May Bank Holiday weekend to nationalise Britain’s railways from a group of Labour candidates sounded alluring but I’m not convinced the figures behind their arguments stack up.

In a letter to the Observer, the group argues that the “hundreds of millions currently lost in private profit would be available to fully fund a bold offer on rail fares”. Recent ORR analysis shows a that the surplus between train operator income and spending is £172 million. That’s just 1.8% of total TOC income and 1.1% of the railway’s overall income. It could certainly be spent on something but it falls very short of being enough for a “bold offer” on a network with 1.6 billion passenger journeys last year.

One of signatories from Brighton told the paper: “Rail fares are a huge issue here and in other commuter areas”. Yet commuters pay some of the lowest fares available on a per journey basis and their fares are already controlled by government. Much of the taxpayer money being ploughed into railways is to ease commuter crowding, with longer platforms and work to increase route capacity for peak use, for example. ORR also reported that there was no overall subsidy for train operators.

Commuter operators have low levels of passenger complaints. ORR statistics show that per 100,000 passenger journeys in 2012/13, c2c generated 12 complaints, FCC generated 22, South West Trains 13, Southeastern 13 and Southern just five complaints.

At the other end of the scale is state-owned East Coast with 212 complaints. Yet East Coast is held as the exemplar of railway operation and the model for nationalisation. And while EC has ideas to improve services, such as extending more trains to Edinburgh, under government control it lacks sufficient trains to put the plan into action.

Elsewhere, government micromanagement saw TransPennine Express not allowed to procure sufficient vehicles, which has led to overcrowding. On Great Western, government foot-dragging means we’re no nearer to knowing exactly where the Thames Valley’s future electric trains will come from.

Are railways really best run from Whitehall? I don’t think so.

Changing infrastructure is a challenge

A recent survey from the CBI has put into stark perspective the challenges that major infrastructure promoters face in convincing an often sceptical public that the improvements they propose are needed and beneficial.

A major theme emerging from the CBI’s work is that the pubic wants its voice to be heard, even if that delays improvements. Another theme is that the public generally don’t believe there’s a problem with Britain’s current infrastructure, although there is more awareness of the limitations of infrastructure they see and experience, such as railways and roads. There’s much less awareness of invisible infrastructure such as sewers and electricity networks and therefore less acceptance that these networks may need improvement work.

For example, the CBI points out that the public do not believe that the lights will go out but also notes that one fifth of Britain’s electricity generation capacity will close over the coming years. I could add that last summer Transport Minister Stephen Hammond rejected any suggestion that the rail network might run short of electricity once Network Rail finishes its lengthy electrification programme.

The nub of the problem, reckons the business organisation, is that the public does not believe the narratives that governments and promoters provide. In its survey, conducted by Ipsos Mori, just 6% said they trusted ministers, with only 15% trusting the company building the project. Local media fared slightly better on 19% At the other end of the scale, 54% of the public said they trusted technical experts, who could be scientists, economists and others “with appropriate technical expertise” according to the CBI.

Those same technical experts should be the ones making decisions about whether to build key infrastructure. In the survey, 64% agreed with this while 22% thought politicians should make the decisions. This comes despite the public having a vote in electing politicians but no say in who the technical experts might be. The CBI points towards independent commissions operating in other countries, including Australia, the Netherlands and Norway. Here these bodies present the facts and the government’s options.

Yet, I can’t help thinking that as soon as an independent body recommends a course of action it ceases to become independent, certainly in the eyes of those opposing the plan. Politicians do not always agree with independent recommendations as the long saga into London airport capacity shows.

The CBI argues that promoters often concentrate on the wrong aspects of the stories they use to sell their projects. For local communities, benefits should be portrayed in local terms rather than pushing national reasons for a project. It’s worth looking at the answers to this survey question “What would make a difference to public support of infrastructure?”: 47% – The quality of life for local people in general; 44% – Local job opportunities; 37% – The local environment; 35% – Your quality of life; 22% – House prices in the local area; 21% – The national economy.

When it comes to forming views of projects, 42% said they would trust people like themselves, followed by 33% trusting local councillors, 28% trusting campaign groups, 24% their local MP, 19% local media and then 11% the company building the project.

CBI commented specifically on High Speed 2, saying: “After the route was revealed, public opposition to the scheme began to grow, as people living in rural areas that the railway would pass through objected to the noise and disruption that they felt it would cause. Other groups began to question the business case for the project as more negative reactions to HS2 surfaced. Reports of increased costs of the scheme led some think tanks, business groups and sections of the press to question the value for money that it provided.

“HS2 has since received support from the highest levels of government, with the Prime Minister, chancellor of the exchequer and secretary of state for transport all publicly arguing for the benefits it could bring. But too much of the discussion has focused on reduced journey times for business people travelling from London, and the overall impact on national GDP, rather than the specific benefits to individual communities such as the benefits to existing commuter services from reducing overcrowding on the West coast Main Line.”

For the Chilterns, HS2 does mean disruption as the line is built but it should also mean that the current line into Marylebone keeps serving local communities. An increase in trains on the West Coast Main Line led to some stations seeing reduced services in favour of long-distance trains. As demand keeps growing and without HS2, it’s entirely possible that more limited stop London-Birmingham trains will be introduced to the Marylebone line. Further Chiltern benefits could come from jobs as the proposed HS2 infrastructure depot near Calvert.

As the CBI says of its survey: “While some objections to development are inevitable, too often local communities oppose new infrastructure projects that could bring benefits, both locally and nationally. This is not about silencing NIMBYs or a vocal minority, but understanding that the most vocal supporters of a national project can raise objections when that project sits on their doorstep.”

 

Little change for East Coast Main Line franchise

In terms of destinations, the East Coast Main Line franchise today is pretty much the same as when GNER took over from British Rail in 1996. The new company added Skipton, and Bradford has been dropped but from King’s Cross it’s still chiefly Leeds and Edinburgh to which East Coast trains run. (Recent operators have also retained BR’s timetable habit of dispatching hourly Tyne Valley trains just minutes before a London train arrives!)

It’s true that frequencies have been increased and so many more trains are running, with many more passengers travelling, but the drive towards clock face timetables has all but extinguished of providing more regional towns and cities with direct links to London.

Lincoln’s service is a vestige of what was promised and the wealthy spa town of Harrogate still only  has one daily train each way. It’s been left to open access operators such as Hull Trains and Grand Central to push the boundaries of East Coast Main Line services, obstructed all the way by government and incumbent franchisee.

The range of EC services should now be changing with the release of the Department for Transport’s invitation to tender for the next EC franchise, to start on March 1 2015 and run for nine years. The ITT makes specific mention that bidders “may choose to serve” Huddersfield, Middlesbrough, Scarborough, Sunderland via Newcastle and Harrogate via York. (In the ITT, DfT tells bidders to assume that open access operations remain at current levels, which makes clear the government’s view of OA expansion.)

There is grand talk in the DfT’s 149-page document. Phrases such as “deliver consistently high standards”, “grow new markets, spread demand, increase seat utilisation, simplify ticketing” and “deliver sustainable, long term socio-economic benefits” all appear in DfT’s objectives for the new deal. It also calls for value for the taxpayer. This is the nub of the new deal – growing takes investment and that takes money away from government’s premium cheque, at least in the short-term.

The winner will need to introduce Hitachi’s IEP trains to the route and help Network Rail introduce ERTMS cab-signalling. It will also have to accede to NR’s expansionist station policy by transferring to direct NR control Newcastle and York stations.

The DfT’s competition for the West Coast franchise collapsed in 2012 amid problems surrounding financial evaluation and risks. For East Coast bids, the ITT explains that they will be classed as financially a high-risk if “the ratio calculated in Sheet FO&C Row 152 of the Financial Templates (‘the Financial Ratios’) is projected to breach 1.050”. I asked DfT what this meant and it said: “Broadly this means that for every £1 of expected expenditure, the franchisee should have at least £1.05 of expected money coming in.”

Very Micawberish. Risk remains in the eye of the beholder. The DfT puts it like this: “Ultimately, the key factor in making risk adjustments will be the Department’s reasonable view of what constitutes the most credible financial outcome, taking into account all relevant information available to it.” I think that translates into: “If we don’t believe your figures, we’ll change them.”

 

RAIL 742 Stop & Examine

FGW sends Laira fitters to London

First Great Western’s Old Oak Common on Sunday February 9 was a busy place. That morning Production Manager Colin Jeffery welcomed extra staff in the form of a team from Laira.

The Plymouth men had volunteered to come to London to help their colleages cope with the extra work load that resulted from Laira being cut from the rest of FGW’s network by the sea wall collapse at Dawlish.

FGW Engineering Director Andy Mellors explained that Dawlish had trapped eight HSTs in the west, of which four had been in service and four under maintenance. East of the block he had 44 sets. Another was due back from a C6 major overhaul at Kilmarnock and would come to OOC while one of the trapped sets would be taken north in its place.

He added that there were 13 units west of Dawlish and they would be worked on by Exeter Depot staff relocating to Laira as and when exams were due.

Laira Team Leader Al Trevorrow told RAIL he was looking forward to some real work. Pulling a pen from the top pocket of his overalls, he joked: “This is usually the only tool I use!”

Working at OOC was similar Laira, team members told RAIL, but the depot was much bigger. The London depot also has the ability to put an entire HST rake of coaches through the wheel lathe during a night shift if faults are found during a daytime exam. And it was a C-Exam the men were here to perform. It would take most of the four days they expected to be in London, they reckoned.

They normally work four days on and four days off. Their last Laira shift had finished on Friday morning and they’d driven to London on Saturday. The team throught they might be back at Laira on Tuesday but for now they were keen to crack on with their C-Exam.

Philip Haigh FGW Laira team at OOC 090214

Laira’s OOC team in their temporary depot on February 9. From left to right: Malcolm Blank, Paul McGowan, Bill Wanrer, Jim Sharpe, Al Trevorrow, Andy Harbutt and Dave Williams. PHILIP HAIGH.

 

 

 Road and rail spending in Scotland

There’s something wrong in Scotland. After several years prevaricating about Edinburgh-Glasgow electrification – chopping bits from the project and pushing it towards the right – Transport Scotland is now proposing to spend £3,000 million on a single road project.

That project will upgrade the A9 Perth-Inverness road to dual carriageway. It’s certainly an important road and, having driven it several times, I know it is frustrating to be stuck behind lorries. However, the bill seems enormous for 80 miles of road.

That’s not what’s worrying the Rail Freight Group. It’s more concerned with the way that Transport Scotland decided on the project.  RFG Scottish representative David Spaven explains: “Transport Scotland have insisted that their 2009 Strategic Transport Projects Review looked at all the options, but we’ve been through the STPR document several times and it’s quite clear that it did not examine cross-modal packages of road and rail investment to see which mix of interventions would best met policy objectives for safety, connectivity, the economy, environment and climate change – and provide best value for money for the taxpayer.

“The Perth-Inverness railway is still two thirds single-track, and proposed rail enhancements are capped at £600 million, yet Transport Scotland plans to spend £3 billion on full A9 dualling. This huge imbalance of investment will lead to freight traffic switching from rail to road, which of course is contrary to Government policy.”

Of course, there’s a referendum about Scottish independence later this year. Surely there’s no link between the Scottish government’s lurch towards roads over rail and the vote?

 

 

Open Access on British railways

I had never heard of the Guild of Travel Management Companies until its email popped up in mid-January extolling the virtues of ‘open access’ railway companies.

Open access refers to those companies that run services as independents rather than under government franchises. They were an important part of John Major’s privatisation in the 1990s yet have never really gained more than a foothold on today’s railway.

Indeed, it’s only on the East Coast Main Line that you will see them with Hull Trains running to Hull and Grand Central to Sunderland and Bradford (although strictly speaking Heathrow Express is an open access operator). A third company, the eponymous Wrexham, Shropshire and Marylebone Railway disappeared a few years ago.

GTMC chief Paul Wait argues: “We firmly believe that greater competition within the UK rail network will make a positive contribution to rail ticket prices, the connectivity of towns not currently served by mainline services and the ability of business travellers to work through their journey, In turn this will support business efficiency and productivity thereby directly supporting business and economic growth across the country, particularly in the regions.”

OA operators apply for paths to run trains from Network Rail and their applications are ultimately approved, or not, by the Office of Rail Regulation. ORR has long preached open access but, citing congestion, rarely grants paths. Government and franchised operators argue against them, usually claiming that they will take money that should go to government. Yet government has not, on the East Coast at least, specified that franchises directly link London with Hull, Bradford or Sunderland.

Since WSMR’s demise, there are no direct London-Shrewsbury trains. Virgin made much play of introducing such trains as it successfully overturned a government decision to award a West Coast franchise to a competitor. Despite the promise, Virgin has now abandoned the plans and, with it, the town.

DB is applying to run West Coast open access under its Alliance Rail subsidiary. Its plan would provide direct London trains for places such as Rochdale. If the East Coast is anything to go by, its fares will undercut those from Virgin – one reason why OA operators are so well-liked by passengers.

I don’t rate DB’s chances. We hear all too often that the West Coast Main Line is full. Solve the capacity problem and OA may flourish. High Speed 2 anyone?

 

 

Do we really need the ‘Withered Arm’?

Destruction of an 80-metre section of sea wall at Dawlish has reopened the debate about the merits of finding an alternative rail route into Devon and Cornwall. The obvious alternative is the ‘Withered Arm’ via Okehampton.

Bft38VlIcAALrtrThe sea wall breach at Dawlish did not just leave Network Rail’s tracks hanging, it also swept away a road and came close to damaging houses. Picture: @SuptArmes

My former RAIL Magazine colleague Andy Roden is spearheading a campaign to reopen the Withered Arm, which is the old London and South Western Railway route that runs inland around Dartmoor. Both ends of the route exist as branches (Plymouth-Bere Ferrers/Gunnislake and Exeter-Crediton-Okehampton/Barnstaple). However, there’s a 20-mile missing section between Meldon and Bere Ferrers.

The route was a victim of the 1960’s Beeching closures but there’s already a well-developed plan to reopen five miles of the western section to restore Tavistock to the rail network. That leaves 15 miles from Tavistock to Meldon Quarry. From Meldon eastwards through Okehampton the line is privately owned by the Dartmoor Railway. It switches back to Network Rail ownership at the former Coleford Junction.

In total, the ‘Withered Arm’ distance between Cowley Bridge Junction (Exeter) and St Budeaux Junction (Plymouth) is 54 miles. This compares with 57 miles via Dawlish but the ‘Arm’ has very low line speeds, 30mph, compared with the Dawlish route’s 60mph. (Speeds do vary and Pacers can run faster than 30mph on the ‘Arm’.)

Aside from the engineering needed to reopen the Withered Arm, planners must also consider the route’s likely traffic. Currently the eastern branch has 14 trains per day (Exeter-Barnstaple) and the eastern line has nine (Plymouth-Gunnislake). Tavistock is clearly worth serving and Okehampton could provide traffic despite it already having a dual-carriageway link to Exeter. But the case for reopening will be far stronger if the line can support itself on its own merits and not simply as a diversionary route should trouble revisit Dawlish.

Campaigners will need to be careful that the debate does not move to become ‘either/or’ for there are many more communities along the main route through Dawlish. There’s Teignmouth, Newton Abbot, Torbay, Totnes and Ivybridge to be considered. It’s clear that if these communities are to continue to be properly served, then the line through Dawlish must remain and must be repaired. If it’s to be repaired, and surely strengthened to counter severe storms, then do we really need the ‘Withered Arm’?

NR transfer pushes ORR towards redundancy

Network Rail’s debt are now our debts. Of course, they always were, it was only accounting niceties and fudge that kept debts guaranteed by government from government’s books.

With the air now cleared, ministers and civil servants can think about how they might take advantage of their new-found freedom over NR as a “central government body in the public sector”, as Transport Secretary Patrick McLoughlin put it to MPs.

In that same statement, McLoughlin said it would “have no effect on rail fares, performance, punctuality, timetables, or safety”. I sincerely hope it has an effect on punctuality given the daily litany of NR infrastructure failures, such as Tuesday’s East Coast Main Line collapse in north London.

He also said that the Office of Rail Regulation would remain as NR’s economic and safety regulator. I don’t believe this is viable in the long-term. It’s hard to see DfT civil servants setting a budget and ministers agreeing that budget with their Treasury counterparts only for another group of civil servants at ORR to then crawl over it before it’s passed to a fourth government body, Network Rail. That all seems very inefficient!

There’s also the matter of DfT’s long-held but unused right to appoint a “special director” to NR’s board. McLoughlin is considering who to appoint and it will be fascinating to see how political the appointee is.

 

Switching Network Rail debts to government could increase sell-off pressure

This week could see Network Rail’s debts of around £40 billion added to Chancellor George Osborne’s account. It depends on a decision from the Office of National Statistics which is currently considering the situation.

For while NR is classed as a private company, it still uses its Financial Indemnity Mechanism (FIM) that sees government guarantee its borrowing. Whenever ministers announce rail investment, they are normally just allowing NR to borrow more to fund the scheme announced. Colloquially, they are doing little more than flexing NR’s credit card!

The Department for Transport explained FIM to the House of Commons Transport Select Committee: “The financial indemnity mechanism (FIM) is a direct UK sovereign obligation of the crown and cannot be cancelled for any reason (prior to its termination date in October 2052). This UK Government guarantee is unconditional, irrevocable and unlimited.”

With that description, it’s hard to see how NR’s debts have been kept off government books since the company was created from the ashes of Railtrack over a decade ago. Since its creation, NR has clung to its private company status and is regulated as a private company by the Office of Rail Regulation which decides every five years what income and spending NR should incur.

Much of the company’s money comes straight from government in the form of the Network Grant, which amounts to around £4bn a year, further strengthening the case for adding NR’s £40bn to the UK’s public sector net debt of £1,200bn. NR’s debts cost around £900m a year and it pays government around £450m as a FIM fee. In total, NR spending is around £7bn a year.

Last week, The Times reported that switching NR’s debt could lead to government ministers being responsible for agreeing such things as NR bonuses.

It could also make ORR’s economic and regulatory work irrelevant. Network Rail could became a DfT agency in the same way as the Highways Agency or the CAA. Budgets could be directly agreed with HM Treasury.

As Britain witnesses a level of rail investment not seen for decades, direct Treasury control could see pressure to reduce this spending, not least to reduce NR’s debt.

Taken to an extreme, government thoughts might turn to selling Network Rail in order to reduce UK debts. That would put the cat among the pigeons!

Plenty of work on the Great Western Main Line

An awards event in Bristol last Friday took me west of Reading on the Great Western Main Line for the first time in many months.

Most recent attention around Reading has concentrated on rebuilding the station. It’s an impressive project that has created a much bigger station (although it’s done little to combat the cold that pervades in winter). There’s plenty of work still to do; witness closed platforms, safety barriers and a collection of plant.

However, it’s now west of the station that should catch headlines today. Network Rail is creating grade-separated junctions to ease the flow of main line trains and allow freight trains to cross under to reach the GWML Relief Lines without creating disruption.

ReadingGraphicLargeA Network Rail diagram showing how new flyovers west of Reading station will ease traffic flows.

I shouldn’t have been surprised at the progress NR has made over recent months. Since First Great Western vacated its old depot in Reading Triangle earlier this year, NR has been able to push forward with its viaducts, casting reinforced concrete pillars and craning spans into place. The line of pillars stretches westwards, with a gap for the West Curve to sneak past. They follow the route of the old Main Lines while wider track remodelling has allowed just enough tracks to cope with the parade of Great Western and CrossCountry trains, in addition to the many freight services.

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Reading West viaduct under construction with the junction leading to West Curve on the left.

Elsewhere on the route west, NR has built a new depot at Swindon for its high-output electrification train that should soon be delivered. Eagle-eyed passengers can spot materials stores dotted along the line, with the most visible at Moreton. Those very sharp of eye will see mast foundations already in place.

IMG_0077

Swindon’s high-output electrification depot stands ready to receive NR’s latest hi-tech machinery.

Through all this work, the train operators – chiefly First Great Western – must continue running and doubtless suffer the delays that come to trains in any project such as this. With long-distance performance already suffering, NR must work very hard to minimise the disruption and delays it causes the many thousands of passengers that use this key corridor. Time will tell whether the infrastructure is up to, or up for, this challenge.