Christian Wolmar
CHRISTIAN WOLMAR remains concerned over plans to sell off non-railway assets, highlighting the safety aspect and the loss of potential future use
NR’s sale of non-railway assets.
I have received lots of responses from readers about my article in RAIL 849, regarding Network Rail selling off its supposedly nonrailway assets in one huge lot of around 5,000 properties. Not surprisingly, they all think it’s a bad idea.
I say 5,000 properties, but in fact Network Rail does not even know how many sites are involved. One reader has enquired to find out the list of properties, but Network Rail told him that there was no precise list “because it is changing as part of the live commercial transaction process”, and that there has been extensive calculation. So, that’s all right then. An asset owned by the state (or rather you and me) is being sold off on a 125-year lease without any scrutiny or even knowledge of its precise nature.
This would not be so worrying if this deal came about because of an assessment of Network Rail’s long-term needs, and the subsequent realisation that many surplus sites would never be needed.
That is not the case, however. Rather, this is a fire sale, a desperate way to plug a gap to satisfy demands from the Department for Transport, and which will actually leave Network Rail financially worse off but with a debt 2% lower and still around £50 billion.
John Pengelly, a reader with 40 years’ experience of dealing with railway property for British Rail and Network Rail, points out that this sale comes after many previous sales of non-operational assets. Therefore, the idea of selling off the entire commercial estate owned by the railway had been considered many times over the years, but was “always resisted, given the potential for adverse impact on the retained railway”.
So many of the supposedly extraneous businesses and their assets have already been sold off (such as Sealink, the hotels, BREL), along with huge swathes of commercial property, that the remainder must - by definition - be problematic. Otherwise, why was it not disposed of before?
In a letter written to me in response to the previous article, Pengelly says: “All of these sales have sought to strip out ‘non-core’ assets to provide a financial injection, leaving only that which was essential for the running of a core railway.
“However, after consideration, the conclusion was always that certain assets were too intertwined to separate without major repercussions.”
With his knowledge of the estate, Pengelly says that this is a real ragbag of property: “Some sit on shared bridges - what happens when the bridge needs rebuilding? Some support the track - who is going to maintain them to stop the track slipping? Some provide access for mandated and intrusive inspections - what happens if access is denied?”
Then there is the potential for causing delays: “Improper occupier practices, such as leaking acetylene cylinders, can shut the railway. What is the incentive for a non-rail landlord to bother checking?”
Network Rail has claimed to have consulted widely, but (oddly) not with the Association of Community Rail Projects, which is likely to be greatly affected by the sale of some of these properties.
The risks of something really disastrous resulting from this sale cannot be discounted. Another reader, who is an expert in railway structures, is acutely concerned about the condition of many of the bridges and arches carrying heavy freight trains. Already, some of
“Another reader, who is an expert in railway structures, is acutely concerned about the condition of many of the bridges and arches carrying heavy freight trains. Already, some of the properties under railway arches are difficult to inspect, and this sale will obviously not make things easier.”
the properties under railway arches are difficult to inspect, and this sale will obviously not make things easier. Quite the opposite.
He wrote to me: “Selling off the leasehold for 125 years is likely to lead to some major difficulties in very few years, since there may be serious defects already hidden behind linings and the new owners would surely have legal recourse for damages if defects were found after their purchase went through.”
He added that he is surprised Network Rail’s engineers are not doing more to prevent the sale, given there are real risks involving some of the structures - particularly railway arches.
This begs the question of whether the safety authorities have taken an interest. Pengelly has tried to get them interested, but received a brush-off.
Although the Office of Rail and Road (ORR) has oversight of Network Rail’s commercial position and regulates land disposals, in response to Pengelly’s intervention, it replied: “The key test for submissions referred to us is whether there is evidence for a foreseeable railway requirement for the land concerned at the time of submission and consideration. This is to protect the implementation of future rail schemes where they are likely.”
In this case, however, since most of the sites relate to ‘airspace’ below arches, there was no need to intervene - even though Network Rail has not provided a full list of properties being offered in the deal.
And as for ensuring Network Rail was getting good value for the deal, the ORR said that was beyond its remit - even though the financial health of the organisation is clearly ORR’s fundamental raison d’être.
Basically, in terms of stations, ORR said that “Network Rail will undertake all steps in accordance with the relevant Station Access Conditions”, should there be any change in the arrangements with tenants. However, as Pengelly pointed out to me: “This means that all those many Network Rail-leased station houses, kiosks, shops and businesses that sit within station areas as part of the ‘commercial’ estate will pass from ‘railway’ control without a murmur of dissent.”
The key, too, is the future. There are probably good reasons why these sites have not been sold off before. There might be a potential future use - look how railway managers and companies would dearly like to have control of many properties sold after Beeching. Or they might simply be too intertwined with the railway to be sold.
Pengelly’s letter warns: “I know personally about two local stations, Romiley and New Mills Central, within which sit Network Rail ‘commercial’ properties, and wonder what benefit will accrue from divorcing these properties from the stations they are embedded in. Let’s hope the new owners at least paint them the same colour as the rest of the station.”
The question is: can Network Rail really be sure that this deal will not harm the future of the railway - especially given that it is not clear what properties are being sold?