Passenger Train Maintenance Contract Realignment

Our client’s leadership team recognised that due to unforeseen types of vandalism, they were completing many expensive repairs that could not be recovered in the current contractual arrangement. They also noted that due to a lack of acceptable condition standards, they often completed unnecessary repairs or repaired to a standard beyond customer expectations, resulting in excessive costs.

ORBIZ was engaged in assessing the situation and facilitating a program to engage the fleet operator in negotiating new commercial terms and implementing new processes to streamline the maintenance delivery process and improve the customer interface.

The approach

An initial analysis of completed work orders relating to graffiti and vandalism damage was completed using two years of historical data. The data was distilled and categorised to understand the problem and modelled to forecast future repair work demand and the costs that would be irrecoverable due to the current commercial agreement.

The overall analysis revealed several critical issues, including:

• A lack of agreed standards for trainset condition post-repair resulted in regular disputes.
• The operator expected the trains always to be returned in an “as new” condition.
• No formal agreement detailing the repair requirements for unforeseen vandalism damage.
• No mechanism to compensate the contractor fairly for repair costs above standard schedule rates.

The solutions

ORBIZ facilitated two distinct activities to resolve the problems and realign the operator and contractor to a new and improved commercial position that benefitted both parties.

First, a series of workshops was facilitated involving representatives from the operator, the contractor’s leadership team, and the contractor’s maintenance team to agree on new commercial terms and standards for trainset condition at inspection following repair work.

The operator acknowledged and accepted unforeseen damage not in the contract (such as e-scooter burnout damage to flooring) into the repair regimes.

With an accurate understanding of costs to date, frequency of occurrence, severity of damage, and a forecast of ongoing repair costs, amendments to the standard contract schedule rates were agreed upon.

Finally, the agreed condition standards were used to create a ‘Lookbook’ that visually references maintenance teams and inspectors when assessing repair requirements and compliance.

The Lookbook was implemented, and all stakeholders were trained in its use. This enabled a standardised approach to maintenance work and inspections to begin, resulting in consistent repairs and lower defect rates at handover.