£35bn for UK rail
Network Rail allocated £34.7bn to spend on its tracks, signalling and structures over 2019-24.
NETWORK Rail will be able to spend £34.7 billion to operate, support, maintain and renew its tracks, signalling and structures over the five years from next April.
That’s the final conclusion of several years of work by the Office of Rail and Road, known as Periodic Review 18 (PR18), and which sets the charges Network Rail can levy on train and freight operators once grants from the Department for Transport and Transport Scotland are taken into account.
NR’s spending in Scotland is £3.672bn, which compares with the £4.85bn Scottish ministers are making available to operate, maintain and renew its network and complete those projects listed for 2014-19. In England and Wales, the DfT’s spending limits for NR are £47.9bn in total for enhancements, with £34.7bn set as the limit for the company’s direct grant.
ORR Chief Executive John Larkinson said: “These plans are focused on improving performance for passengers and freight operators by getting the basics right - ensuring that the railway is properly maintained and renewed, and on improving the daily operation of the railway.
“There is no time to lose. Network Rail and, in particular, the routes and System Operator must make sure they are ready to deliver from day one of the new Control Period. That is why we have and will continue to report on - and where necessary challenge - Network Rail’s readiness.”
For the first time, ORR has split its settlement geographically by NR routes, to permit more devolution to route managing directors and to better hold the company to account. The biggest spender is set to be NR’s London North Western Route (£8.7bn) and the smallest will be Wales with £2.0bn (see table).
The five years from next April comprise Control Period 6 (CP6), and are set to include a sharp increase in the renewals that Network Rail will undertake, despite concerns from ORR about the profile of this work and NR’s readiness to start in April.
“We remain concerned about Network Rail’s plans which continue to show a significant ramp-up in the middle of CP6, with a fall over the longer-term,” the regulator said.
ORR has accepted NR’s plans to increase renewals spending by 17% in England and Wales to £14.6bn. In Scotland, renewals spending rises from £1.6bn to £2.0bn.
ORR is introducing a new performance measure for NR that takes it away from traditional punctuality targets that are easily understood by passengers. In their place comes a measure called ‘Consistent Route Measure for Passengers’ (CRM-P). ORR says it will measure NR’s contribution to delays experienced by passengers. Over the past year, NR routes have delivered CRM-P performance varying between 1.0 and 4.0. Over CP6, each route is required to gradually improve.
ORR pushed NR to agree performance trajectories with each of its passenger operator customers as it developed PR18. Measured in PPM (Public Performance Measure), ORR has now published trajectories for four operators, after NR was unable to agree them with others. The four are Arriva Rail London (95.0% by the end of 2023-24), c2c (96.5%), Merseyrail (95.6%) and Great Western Railway (89.9%). In Scotland, NR must deliver 92.5% PPM for ScotRail and 80% right-time arrivals for Caledonian Sleeper.
Despite the moves towards devolution, ORR has allowed NR to strengthen its centralised System Operator function that conducts strategic planning as well as timetabling.
System Operator received severe criticism in a recent report by ORR Chairman Stephen Glaister, following last May’s timetabling meltdown. System Operator is now to be allowed to add 100 staff to its 700-strong timetabling team and spend £270m over CP6, which ORR describes as a substantial increase. “These extra resources need to be used wisely,” said ORR.
Track access charges will change as a result of PR18. ORR said that charges for freight and charter operators will rise by 1.9% and 1.0% respectively in each of the last three years of CP6, having been held for the first two. ORR added that it expects freight operators and charters to pay their full wear and tear costs by the end of CP7 (2029).
Charges to recover NR’s fixed costs will also change, with charges to be levied on open access operators running inter-urban trains. ORR said this was to support competition between passenger operators, and explained that such operators would receive greater opportunities for access in return.
NR now has until March 31 2019 to publish its CP6 delivery plan. October 31’s publication of ORR’s final determination of NR spending and charges follows last summer’s draft determination, which has been the subject of discussion between ORR and NR since then. The changes in PR18 take effect in April 2019, but NR can object which could lead to a review by the Competition and Markets Authority.