With blockchain technology soon to be implemented on the Core Valley lines in Wales, NCE explores ways the wider rail industry can benefit from its use.
Blockchain is well known in the financial sector as it has played a key role in the development of cryptocurrencies. But its potential is much broader.
“Blockchain is an immutable digital ledger of transactions. It is a solution that makes it easy to store, share and verify valuable information, typically used across various organisations,” says software company Finboot chief executive Juan Miguel Perez.
Like common data environments (CDEs), a blockchain ecosystem offers a single source of truth where data from numerous sources can be accessed. The difference between them is the way the data is stored and structured.
Perez explains that blockchain technology is designed in such way that data is not stored in a single location, but replicated through a distributed network.
“Every time new data is registered in each ‘node’ of the network, all nodes need to verify and agree on the contents of the data.
“This prevents the falsification of records, as they will be rejected by most of the network,” he says.
With blockchain technology, data is stored in blocks linked together in a chain, secured through the use of cryptography which transforms it into a fixed number of digits to prevent tampering. With this technology, data cannot be deleted and a record of changes is kept, unlike CDE systems.
In recent years, various industries have been looking to adopt this technology.
Perez says that Finboot, which developed the Marco blockchain platform, has gained clients in the oil and gas, steel and chemicals industries and more recently the rail sector.
Over the past year, it has been collaborating with infrastructure consultant Amey to develop a blockchain solution for railway possession planning, which is to be implemented on parts of the upgrade and maintenance of the Core Valley Lines in south Wales.
Possession planning is not the only rail application to which blockchain technology could be adopted.
High Speed 2 (HS2) Ltd is looking into using it to create a carbon marketplace, after it successfully tested it for plant hire procurement in collaboration with members of its supply chain (see box overleaf).
Amey partner Tom Kinnear believes that the rail sector can benefit from this technology because projects involve several stakeholders, making data transparency and accountability crucial. “You’ve got quite a complex stakeholder environment where you’ve got the infrastructure owner, operator, regulator and supply chains across the field. Key decisions need to be made using data and organisations need to be held accountable for those decisions,” Kinnear explains.
Possession planning
Amey has been collaborating with Finboot to create a blockchain solution for rail possession planning, after securing £30,000 from Welsh Government funded Technology Connected organisation in July 2022.
Transport for Wales (TfW) has appointed Amey as the infrastructure manager for the Core Valley lines, which are currently being upgraded (NCE, last month). Blockchain will be used by Amey and TfW to help with plans for engineers to safely access rail tracks for maintenance, renewals and enhancements.
Amey chose this application to test the technology because it identified inefficiencies in the current process that blockchain could resolve.
A blockchain system is being implemented on the Core Valley lines project in Wales
Kinnear says the Possession Planning System, currently used by Network Rail to manage the booking and recording of engineering and access requirements, lacks the functionality to cleanse data or bring data sets together. Planners have to download the full database which includes data which is irrelevant to them, for example isolation information for isolation planners. Kinnear says the blockchain solution has those functionalities.
He says that with current possession planning systems “human behaviours kick in” with parties deciding when and what information can be shared according to their needs. “Information being withheld delays the decision making process,” he adds.
Blockchain removes these human behaviours because everyone involved in a project has real time access to everyone else’s data.
Kinnear adds that the technology can reduce the number of disputes as there will be greater visibility of who made a specific decision and when.
Amey and Finboot have prepared an ecosystem using the Marco blockchain solution that will be implemented for two months for a section of possession planning activities associated with the Core Valley lines upgrade and maintenance.
“After this period we will review the performance and adapt, if needed, to improve the solution,” says Kinnear.
Further adoption
An alternative use of this technology currently being explored by HS2 Ltd could help the industry reduce its carbon footprint.
HS2 senior innovation manager Charlotte Hills says HS2 Ltd has been collaborating with Skanska Costain Strabag JV, Balfour Beatty Vinci JV and digital technology innovation centre Digital Catapult to investigate whether blockchain can help create a carbon marketplace.
The project started in October 2022 and its strategic phase is to be completed next summer.
HS2 already has carbon reduction targets for its supply chain partners, but the carbon marketplace is intended to incentivise them to reduce their emissions beyond these by better aligning carbon reductions with financial incentives.
Hills explains: “Broadly, the way the system will work is to create allowances for carbon reductions.
“Any part of the project that reduces carbon by more than its set targets will have allowances to sell on the marketplace, while those who struggle to hit their carbon reduction target can purchase allowances through the marketplace to meet their targets.”
She says blockchain technology will make the marketplace verifiable, building trust in the system.
“Third party verification of data can be added, visible to all, and the immutable nature of the data means all parties are accountable for the data they submit.
“Blockchain makes it easy to track carbon allowances from inception to use, which also means they can’t be double counted,” Hills says.
Even though carbon marketplaces have been used successfully by industries such as aviation and steel, this type of system has never been used for infrastructure projects.
Hills says the project is in the early stages and that the partners are currently working on developing the ecosystem and determining the marketplace’s rules and incentives for companies to participate.
Even though some clients and contractors in the rail industry have shown interest in blockchain, there are barriers to its wider adoption. Kinnear says the biggest ones are a lack of understanding of the technology and its cost, which is “a little bit high right now”.
Mitchell says there are issues with adopting new technologies because they make existing systems that companies have invested heavily in, redundant.
Perez concludes: “There’s always a resistance to change, but once you can provide sufficient evidence that the business value that you get from that change is sufficiently exciting, then people will jump on and the adoption will accelerate.
“That’s exactly the task that we have ahead of us right now, to demonstrate the quantifiable value of this initial implementation.”
Blockchain for procurement
Between June 2021 and March 2022, HS2 Ltd, the Skanska Costain Strabag joint venture – the main contractor for the southern section of High Speed 2’s Phase 1 – and Deloitte carried out a trial to investigate the efficiencies blockchain could bring to plant procurement. It focused on the procurement of plant hire to mitigate risk on a small section of the contract.
HS2 head of innovation Howard Mitchell explains that it was decided to test the technology on this application because it involves an exchange of information across a network of companies.
He says: “You have many digital interactions. You have to pay for hourly uses, to check things are maintained, insurance, so you have all these data points flying around.
“Blockchain provides a great opportunity to create a single digital ledger, which would allow the different parties involved to access the same source of information without each having their enterprise resource planning systems interfacing.”
Mitchell says in the traditional construction ecosystem each company has its own system, which is developed independently of others and this can slow things down.
A graphic user interface and the blockchain technology behind it was created for the trial. Its design includes business process maps to support the processing of invoices and timesheets as well as a solution to allow its integration with existing financial management systems.
Through the ecosystem there was a reduction in the total number of processes for timesheets and invoices from 24 to 11.
“The blockchain provided a secure, trusted platform that removed the need for duplicate processes across similar systems,” says Mitchell.
He adds that blockchain’s decentralised structure enabled the automation of tasks like timesheet approval and invoice matching, reducing the number of people involved.
“The integration of smart contracts, a core feature of this project, then streamlined operations further. These contracts automatically verify timesheet and invoice data against a central system, ensuring accuracy and freeing contractors from manual tasks,” he adds.
Mitchell explains that some of these activities could be carried out using a common data environment but this type of system “hinges on trust in a central entity for data management and this reliance can introduce vulnerabilities and single points of failure, potentially undermining the integrity of the data”.
According to Mitchell this technology benefits everyone, as clients and contractors get clearer reports of what is happening on site and can check that the supply chain is invoicing and paying invoices in accordance with their guidance, while suppliers get paid more quickly.
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