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2003-09-23 NET-001
Network Rail

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Network Rail publishes cost submission to regulator


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Network Rail



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Network Rail

Network Rail publishes cost submission to regulator
_______________________________________________________________


date
23 September 2003
source Network Rail
type Press release



National

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:

· A two-year deferral of some renewals, in line with the emerging conclusions of the Rail Regulator.

· 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.

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’.

Contact information

Media Relations (National)
020 3356 8700
mediarelations@networkrail.co.uk


Railhub Archive ::: 2003-09-23 NET-001





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