Network Rail has delayed the publication of a list of possible third-party funded rail enhancement projects, with chief executive Mark Carne citing the collapse of Carillion.
Carne said the list, which had been due to be published by the end of last year, had been put on hold “to make sure the full impact of the current situation with Carillion” was reflected.
Third-party funded projects would involve developers putting cash up directly for railway enhancement projects, with returns for investors coming either direct from Network Rail itself or from the sale of homes built on the site of the schemes.
Carne outlined a potentially enlarged role for third-party funders when he unveiled Network Rail’s £49bn spending plans in control period 6 (CP6) – 2019 to 2024. He said funders could “generate financial benefits outside of the railway because of the railway”.
He added that “third party developers… are going to build lots of houses which are going to be.. worth significantly more because they’re near the railway. So some of that value needs to pay for the railway.”
Carne continued: “There are lots of stations, where the developers come and bang on my door and say if you would only build this station I could get rich building all the houses. And I say well that’s really interesting to me but if you give me some money from your wealth I can build the station so we’ve got to find a way of bridging the gap.”
He said that a list of potential projects suitable for third-party funding was being prepared but would be delayed to factor in the impact of the collapse of Carillion. The contractor went into liquidation in January this year sending shockwaves through the construction industry.
Among a number of changes to how CP6 will be funded, new enhancement projects have been split off and will need to apply to the treasury separately for government cash, meaning they will compete against other infrastructure projects, or attract private funding.
A new structure will also see increased devolution for the different routes that Network Rail operates. Carne said each region now had a business development director who will be responsible for liaising with local stakeholders to identify potential privately funded schemes.
“At a route level, the business development leads are out there working with train operating companies and partners with schemes and they’re inviting interest,” he said.