{
  "docId": "019dd923-5de0-76bd-a165-578b9862173f",
  "docSlug": "091122f6e046fa86",
  "documentTitle": "Rail industry cost and revenue sharing (2011)",
  "authorId": "misc",
  "authorName": "L.E.K.",
  "documentKindSlug": "consulting-deck",
  "documentKindLabel": "Consulting deck",
  "sourceTypeSlug": "strategy_consulting",
  "sourceTypeLabel": "Strategy consulting",
  "presentationDate": null,
  "orientation": "landscape",
  "aspectRatio": 1.414,
  "pageNumber": 71,
  "pageCount": 170,
  "prevPage": 70,
  "nextPage": 72,
  "slideType": "other",
  "function": "present_solution",
  "density": "dense",
  "nDataPoints": 0,
  "notes": "The slide uses a two-part structure to address two distinct governance concerns raised by the ORR.",
  "elementsJson": [
    "headline_text",
    "bullet_list",
    "callout_box"
  ],
  "metadataConfidence": 0.9,
  "imagePath": null,
  "slideHref": "/slides/019dd923-5de0-76bd-a165-578b9862173f/71",
  "deckHref": "/decks/019dd923-5de0-76bd-a165-578b9862173f",
  "deckJsonHref": "/decks/019dd923-5de0-76bd-a165-578b9862173f.json",
  "deckAnchorHref": "/decks/019dd923-5de0-76bd-a165-578b9862173f#slide-71",
  "components": [
    {
      "bbox": {
        "h": 0.15,
        "w": 0.14,
        "x": 0.09,
        "y": 0.23
      },
      "kind": "callout",
      "text": "Safeguarding economic benefits",
      "attrs": null,
      "subkind": "primary",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "6b54b1b8-babc-49e0-9bfa-6e54afb9b3fb",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.15,
        "w": 0.14,
        "x": 0.09,
        "y": 0.65
      },
      "kind": "callout",
      "text": "Preventing leakage of NR funding",
      "attrs": null,
      "subkind": "primary",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "bf7e9252-e2d4-41f1-8ce2-f95283025dc0",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "callout",
      "text": "The risk of leakage of NR funding could be minimised by making the cost and revenue sharing mechanism symmetrical, i.e. including both outperformance and underperformance.",
      "attrs": null,
      "subkind": null,
      "toolName": "Visual emphasis",
      "toolSlug": "visual-emphasis",
      "confidence": null,
      "componentId": "019dd951-edab-7238-a550-96fae9b09d8f",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.02,
        "w": 0.3,
        "x": 0.09,
        "y": 0.93
      },
      "kind": "disclaimer",
      "text": "ORR/ATOC/Network Rail. Rail industry cost and revenue sharing.",
      "attrs": null,
      "subkind": null,
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "b82a51d3-3778-492b-bb26-41cb17d52d37",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.25,
        "w": 0.65,
        "x": 0.26,
        "y": 0.65
      },
      "kind": "list",
      "text": "The ORR's ITT also highlighted a concern regarding “Network Rail funding going to train operators via sharing mechanisms being lost to the railway in dividend payments (cost to government)”\nFirst, in the event that savings are made as a result of funders agreeing to a material reduction in outputs then the relevant funders should receive a direct share of the savings from that specific change – as they would currently through the franchise change mechanism\nSecond, the risk of leakage of NR funding could be minimised by making the cost and revenue sharing mechanism symmetrical, i.e. including both outperformance and underperformance\nThis is discussed further during the evaluation of Options 1 and 2 – symmetrical and outperformance only Regional EBS mechanisms",
      "attrs": null,
      "subkind": "bullet",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "b46674f5-1cc3-43f8-a83e-b00df73ac332",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.35,
        "w": 0.65,
        "x": 0.26,
        "y": 0.23
      },
      "kind": "list",
      "text": "The ORR's ITT for this project highlights a concern regarding the “potential to focus attention on most profitable services, rather than services with greatest economic benefits”\nIt is government's duty to specify and fund any rail industry outputs that would not be delivered by a purely commercial railway. The cost and revenue sharing mechanism would not change this\nThe mechanism would incentivise NR and train operators to identify where they can work together to improve VfM by either increasing revenue or reducing costs. This would naturally lead them to focus on the areas where they consider that they have the best chance of making the biggest impact\nIn the course of their work, it is entirely possible that they would identify that significant VfM improvements could be facilitated by changing some of the required outputs specified by funders or the ORR. In these situations a small reduction in economic benefits could be more than offset by a large improvement in VfM\nHowever, as noted on the last slide, we propose that changes to the required outputs could only be made with funders and ORR's approval",
      "attrs": null,
      "subkind": "bullet",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "e86eb566-ba17-4b5c-bc6c-d0e10eeabd2d",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.05,
        "w": 0.8,
        "x": 0.09,
        "y": 0.15
      },
      "kind": "title",
      "text": "9 – Governance: Safeguarding economic benefits and preventing leakage of NR funding",
      "attrs": null,
      "subkind": "headline",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "922e2150-b72c-4aa5-a784-c24c56f5195e",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [
    {
      "name": "Problem Statement Canvas",
      "slug": "problem-statement-canvas",
      "agent": "Architect",
      "layer": "slide",
      "matchId": "7a7db807-b25d-43d8-bcbc-f9a470bd7070",
      "evidence": "The ORR's ITT for this project highlights a concern regarding the “potential to focus attention on most profitable services, rather than services with greatest economic benefits”",
      "confidence": 0.5
    }
  ],
  "frameworks": [],
  "arcBeats": [
    {
      "to": 80,
      "from": 61,
      "beatId": "f6c8096e-5bf3-4157-90b0-fd229f7d9bcd",
      "arcName": "The Consultant's Gambit",
      "arcSlug": "consultants-gambit",
      "beatName": "Impact & Next Steps",
      "beatSlug": "consultants-gambit-impact-next-steps",
      "evidence": "The document outlines the implementation plan and next steps for the recommended solution.",
      "position": 4,
      "confidence": 0.8,
      "parentBeatName": "Resolution",
      "parentBeatSlug": "resolution"
    }
  ],
  "loops": [],
  "imagePathAlt": null,
  "thumbSrc": null,
  "thumbSrcAlt": null,
  "locked": true
}