Network Rail debt rises to £46bn in 2016-17
NETWORK Rail’s net debt rose from £41.6 billion in 2015-16 to £46.3bn in 2016-17.
Revenues rose to £6.26bn in 2016-17, against the previous year’s figure of £6.1bn, but operating costs also rose (by £124 million to £2.84bn).
The figures are contained in the infrastructure manager’s annual report, released on July 19. The report also shows that capital expenditure increased from £6.68bn in 2015-16 to £6.79bn in 2016-17, and that NR made pretax profits of £483m.
In his introductory statement to the report, NR Chief Executive Mark Carne said: “Whilst recognising the progress we have made in the last 12 months, we must also acknowledge that this has been a year when poor train performance has rarely been out of the headlines.
“We have reached a point where the rail industry must change the way it operates in order to meet the needs of passengers in the years ahead.”
Network Rail missed its Financial Performance Measure (FPM) by £100m for total efficiency generated excluding enhancements, and its FPM for enhancements by £70m. It also fell short of its level crossing risk reduction measure by 20 percentage points, with a figure of 60% against a target of 80%.
However, on workforce safety, the company beat its target of 120,000 close calls raised comfortably, with a figure of 205,555 calls. The report defines a close call as anything that has the potential to cause harm or damage - NR considers a higher number as an indication that staff are taking their safety responsibilities seriously.
It also exceeded its asset management Composite Reliability target of 15% by 0.8 percentage points.
NR blamed higher than predicted costs in the construction supply chain, shorter engineering possessions, and increased expenditure on delay mitigation as reasons for the increase in its operating costs.
Other factors cited by the NR regions for higher costs were increased unit rates for the delivery of high output track renewals in performance penalties paid to train operators (Anglia, South East, Wessex, Western). NR claims reliability of infrastructure is the best on record, but has deferred some of what it calls ‘non-essential’
This is the first year that NR’s new Freight and National Passenger Operators division has reported, and this beat many of its targets. However, the decline in coal traffic hit freight revenues, which fell by £1m to £52m. Property income rose by 7% in 2016-17, but the Property division says it plans to accelerate disposals of land and property in 2017-18.
NR Chairman Sir Peter Hendy said: “The extraordinary growth in passenger numbers means the network is now full in many areas, and this congestion inevitably increases delays when anything goes wrong. It has also meant we have less access than ever before to make essential improvements.
“We are leading the way the whole rail industry operates in the years ahead, by both embracing new technologies and working ever more closely together to deliver the most effective and efficient outcomes for passengers. But there is much more to do to deliver the affordable and reliable railway our country needs.”