NR CP6 funding

ORR initiates the process for calculating Network Rail’s track access charges and funding needs for the next Control Period.

RAIL regulators have begun the long process of calculating Network Rail’s track access charges and funding needs for 2019-2024 (known as Control Period 6, CP6), with the launch of the first of many consultation documents on May 18.

The initial document calls for views about the process the Office of Rail and Road (ORR) intends to take. Chief Executive Joanna Whittington said: “ORR’s review will support a safer, more efficient and better-performing railway, delivering value for passengers, freight customers and taxpayers into the next decade and beyond.

“Network Rail is increasingly devolving responsibilities to local managers who can work with local communities and businesses. We propose to support this by regulating the company in a different way, looking separately at its national and local responsibilities.”

Since ORR last reviewed NR’s charges and funding, the track owner has been taken under direct government control, with the reclassification of its debts onto the public books. These debts are predicted to reach £51 billion by the end of the current 2014-2019 Control Period, and NR is now subject to strict borrowing limits imposed by the Treasury.

ORR notes: “The borrowing limits and the process for agreeing them is the most important financial issue affecting Network Rail in CP6.”

Reclassification has fundamentally changed the company’s situation - it is no longer allowed to borrow extra money to cope with projects overspending. This ability was always set against the proviso that ORR had to agree that the overspend had been incurred efficiently.

The problem of overspending projects was thrown into sharp focus during NR’s plan to electrify the Great Western Main Line, when costs tripled. That led to the Government dismissing NR’s chairman and suspending plans to electrify the Midland Main Line and a trans-Pennine route. Subsequent reviews criticised ORR, and the regulator recently appointed a new chief executive.

ORR’s review of access charges must also take account of the Government’s moves towards devolving responsibility for transport towards regional government, and NR’s plans to increase the responsibilities of regional directors.

It appears intent on keeping the pressure on NR to become more efficient, although ORR admits that it has to decide whether to set targets “based on what a fully efficient company might be expected to achieve, or reflect a realistic level of challenge for what Network Rail might reasonably be expected to achieve in practice”.

Its initial consultation revealed that ORR plans to look at five highlevel areas: Q Regulating at route level. Q Improve the regulation of system operation. Q Refine the framework for outputs and their monitoring. Q Increase transparency around costs and improve incentives. Q Support new ways to treat enhancements.

ORR’s consultation ends in August. It expects the rail industry to publish its initial plan for CP6 in September, so that the UK and Scottish governments can publish in summer 2017 their High Level Output Specifications (HLOS) and

MARK PIKE. The regulator (ORR) is beginning the process to determine the amount of money needed by Network Rail for the five-year period from 2019-2024. On May 26, preserved 37025hired by Colas Rail, tails the 0954 Bristol Barton Hill-Bristol Middle Hill Siding (via Weymouth) test train past Yeovil Pen Mill signal box, on its return from the coast. The unusual station at Yeovil Pen Mill is one of the few places in southern England that retains a working signal box and semaphore signals.