Network Rail completed £33.31M of asset sales to the end of May against a target of £1.8bn, with less than two years in which to raise funds that will go toward plugging its enhancements funding gap caused by cost overruns.
The rail infrastructure operator and owner’s chairman Sir Peter Hendy made the pledge in his November 2015 report into replanning the current spend programme – Control Period 5 (CP5).
At the time, Hendy explained that estimated costs for enhancements had risen from £11.8bn in 2012 to £15.3bn, and blamed inadequate planning and scoping of a number of projects worsened by poor cost estimating, particularly of its beleaguered electrification programme.
“To fund the increased enhancement expenditure, Network Rail will address the funding shortfall by asset divestment totalling around £1.8bn through divestment of non-core assets,” said the November 2015 Hendy report. “This includes considering options for the sale of property assets (including retail units in managed stations and the commercial estate), spare capacity on the telecoms network and non-core rail assets such as depots.”
Network Rail told New Civil Engineer that as of the end of May sales had amounted to £33.3M, which had come from eight property-related sales. In a statement it said today: “Our desire to raise £1.8bn has not changed.”