Network Rail has published its Cost Submission to the interim review of track access charges currently being undertaken by the Office of the Rail Regulator. The submission – effectively Network Rail’s request for funding for the next five years - analyses the likely impact on costs and performance of the recent proposals from the Rail Regulator and the SRA.
The paper, which takes on board the combined impact of implementing certain proposals from the ORR and SRA, concludes that Network Rail should spend £24.5bn over the next five years, a reduction of £5 billion compared to the previous forecast published in June. Today’s Cost Submission confirms that train punctuality will reach 90% at the end of this period.
The £5 billion expenditure saving is in addition to the £5.5bn efficiency savings announced in June. This means that, in total, Network Rail has reduced April 2004 – March 2009 projected expenditure by £10.5bn, or 30%.
The new spending reductions are primarily achieved in two ways:
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A two-year deferral of some renewals, in line with the emerging conclusions of the Rail Regulator.
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A differentiated approach to network outputs which allows for savings to be made in both maintenance and renewal expenditure on the more lightly-used routes, in line with the Strategic Rail Authority’s draft Network Output Specifications document.
Cost Sub – 2
Discussions with both the ORR and SRA concerning the West Coast Mainline Upgrade project are ongoing.
Speaking upon publication of the Cost Submission, Network Rail Chief Executive John Armitt, said: “Network Rail today publishes our funding request for the next five years, delivering savings of £1bn a year compared to the previous forecast. The new forecast takes on-board many of the recent proposals from the SRA and ORR. This consensus on the way in which we might achieve affordable spending is indicative of the constructive way in which the whole interim review process is being managed.
“The cost proposals we publish today represent value for money and demonstrate Network Rail’s commitment to efficiency and affordability on the railway.”
For illustrative purposes, the Cost Submission also models the impact of deferring renewals beyond two years. The paper concludes that this would begin to have a significant negative impact on performance, roughly halving the rate of performance improvement. Under this model, 90% punctuality would not be achieved until 2012/13, rather than 2008/09 under Network Rail’s proposed ‘base plan’.
Notes to Editors
Cost Sub – 3
Network Rail is the 'not for dividend' operator of Britain's rail network. Our objective is to provide safe, reliable and efficient rail infrastructure.
We own and maintain the tracks, signals, tunnels, bridges, viaducts, and level crossings. We also own the network’s 2,500 stations, and manage the largest and busiest. We provide access to the tracks for every passenger and freight train, timetable their journeys, and operate the signalling, which controls their movements.
Network Rail is a company limited by guarantee with members instead of shareholders. It is run as a commercial organisation, but any operating surplus is re-invested in the rail network.
Our core focus is the operation, maintenance and renewal of existing rail infrastructure, with the Strategic Rail Authority taking the lead on enhancement projects.
We have set clear targets to improve performance and reduce costs, but safety is always at the forefront of our activities as we rebuild Britain's railway.
Details about the Company can be found on the Network Rail web site: www.networkrail.co.uk
For media enquiries please contact the Network Rail press office on
020 7557 8292 / 3
