Network Rail is selling off its commercial property business in England and Wales in a bid to raise £1.8bn to help plug the funding gap in control period 5 (CP5).
In its announcement Network Rail said the sale of its 5,500 property-strong commercial estate business, mostly consisting of spaces in railway arches, would contribute a “significant injection of cash”.
A spokesperson for Network Rail said the company would not speculate on costs.
In 2015 the rail body’s chairman Sir Peter Hendy pledged to sell £1.8bn of assets to help finance enhancement projects in CP5 (2014-19), while borrowing an extra £700M from government. At the time estimated costs for the CP5 schemes had risen from £11.8bn in 2012 to £15.3bn.
By May this year Network Rail had only sold £33.31M of its assets, with just two years to go to raise the money. Ambitious cost estimates and project overruns were partly blamed for the £2.5bn funding gap in Hendy’s 2015 report.
“The sale will bring a major cash boost to help fund key projects across England and Wales as part of the Railway Upgrade Plan,” said Network Rail chief executive Mark Carne.
“Passengers are about to see a bigger, better railway, with more reliable, more frequent services, and upgraded stations and facilities as these huge projects finally come to a conclusion in the months ahead.”
Most properties will be sold on a leasehold basis as Network Rail will need access to the railway; the sale will not affect operations or improvement schemes. Money from the sale will go towards major upgrade projects such as the Thameslink Programme and Crossrail.
Financial advisory group Rothschild & Co is managing the sale.