NETWORK Rail must be allowed to spend £22·2bn on operating, maintaining and upgrading the UK’s national network over the next five years, Rail Regulator Tom Winsor ruled on December 12. His decision follows research and consultation by the Office of the Rail Regulator, and provides around £10bn less than NR had requested in its June 2003 Business Plan.
NR will decide this month whether it is willing to accept the final conclusions of the Regulator’s Interim Review. This defines the track access charges that train operators must pay for a new Control Period 3 which starts on April 1, replacing the final two years of the present CP2 which covered the five years from April 1 2001. Railtrack’s collapse in October 2001 was in part triggered by higher renewal costs following the Hatfield derailment a year earlier which had not been reflected in the CP2 review.
NR described the Regulator’s new spending targets as ’extremely challenging’, with several projects including some West Coast Route Modernisation works to be delayed to reduce the overall cost. It will develop by March a new Business Plan covering the 10 years from April 2004, to reflect the permitted level of expenditure.
Chairman Ian McAllister said the decision gave the company ’certainty, stability and visibility regarding our future income’. However, the government has not provided any extra grant to meet the Strategic Rail Authority’s obligation to underwrite increases in track access charges set by the Regulator. A gap of around £7bn exists, and discussions between SRA, NR and Treasury officials have failed to find ways to close it. NR’s views on ’the optimum profile of revenue and borrowings’ will be submitted to the Regulator at the end of February.
