The Office of Rail and Road (ORR) has called upon Network Rail to inject an extra £1 billion into renewing the country's railway network.

The regulator made the call after assessing Network Rail's five year plans to spend more than £34bn (£30bn in England and Wales and £4bn in Scotland) to 2024 (known as Control Period 6 or CP6).

In its review, the ORR said Network Rail's route-based plans are better than the plans for the previous five years, yet it has identified greater scope for the company to do more than it proposed to boost reliability and safety, for the benefit of both passengers and freight customers.

Some of the key amendments include;

• Deliver around £1bn of additional renewals work to replace worn out assets, funded through changes including greater efficiency and other savings, bringing the total renewals budget to £18bn across Britain.

• Include an extra £80m for additional safety-related expenditure

• Reallocate £0.9bn of the £1.7bn England & Wales funding to manage financial risks to Network Rail's routes so that they can develop their own plans to spend this money efficiently

• Make sure the company works effectively with all passenger train companies and that they fully engage in the process to finalise passenger performance targets

-- Advertisement --

• Create a £10m performance innovation fund to support testing and implementing new ideas across Britain

• Review the profile of its spending to smooth it over the five years of CP6, addressing concerns from the supply chain about the impact that fluctuation in spending can have on efficiency, and;

• Strengthen the monitoring and financial controls on the Network Rail System Operator function to provide greater assurance given the significant increase in funding (from £145m in CP5 to £272m in CP6).

ORR also revealed a cap will be placed on variable access charge increases for freight and charter operators, while freight services carrying biomass for the electricity supply industry will be subject to charges which recover some of Network Rail's fixed costs in CP6. In addition, new open access operators will pay charges that recover some fixed network costs.

In Scotland, the ORR said Network Rail could further improve its efficiency by around £70m and should also reduce its planned spend on research and development. Together with other changes, this would release around £150m, which Transport Scotland could spend in other areas.

Joanna Whittington, Chief Executive, ORR, said: "The entire rail industry, including passengers, freight customers and train operators, relies on Network Rail to deliver a high-quality service.

"ORR's initial assessment of Network Rail's five year plans shows that the transition from a centrally run company to one structured round eight geographic routes has improved the quality of the plans but we want to see £1bn more spent on renewing the railway to improve reliability and boost safety.

"ORR will be monitoring and enforcing delivery by each of the routes, so that passengers and freight customers will be able to rely on the railway for the essential service it provides."

Speaking about Network Rail's plans for Scotland, Ms Whittington added: "We are pleased that each part of Network Rail has more clearly set out and justified what it will deliver in Scotland. This demonstrates the benefit of increasing devolution across the whole of Network Rail.

"But more work is needed to confirm exactly how Network Rail will meet each of the Scottish Ministers' published requirements, and there is scope to make further cost savings.

"We will also be strengthening our monitoring of Network Rail, with a published tracker showing its delivery against each requirement, and more comparisons of how Network Rail in Scotland compares to routes in England and Wales."

(LM/MH)