Network Rail’s debt has risen to above £50bn for the first time ever.
In its annual report, Network Rail revealed that net debt had risen to £51.2bn for 2017/18, up from £46.3bn in 2016/17.
Net profit has also slumped 90%, from £483M in 2016/17 to £48M. Meanwhile operating costs grew from £2,836M to £3,192M with capital expenditure slightly down from £6,788M to £6,634M.
A Network Rail spokesperson said: “Our financial performance in 2017/18 was in line with expectations set out for the final years of our CP5 regulatory settlement.
”The increase in debt was fully anticipated, and is a consequence of record levels of investment in the railway, encapsulated in our railway upgrade plan, which is vital to increase capacity, relieve congestion and provide better facilities for passengers.”
In the report, Network Rail chair Sir Peter Hendy applauded outgoing chief executive for his time at the rail operator and outlined plans for CP6.
“We are really seeing a transformation take place at Network Rail,” he said. “Since Mark Carne CBE took over as chief executive in 2014, he has completely transformed the safety culture at Network Rail.”
”Mark has also led the development of the best business plan for a future control period that Network Rail has ever had, and which enabled us to secure a Statement of Funds Available of £53bn, the largest in the railways history.”
He added: “Out plan for CP6 will also start the railway’s digital age with digital train control and signalling that will enable even more services to run, more safely and at a lower cost.”
The accounts were submitted to government in July and do not include the £1.46bn raised through an asset sale announced earlier this month.
The Office for Rail and Road (ORR) warned that the small amount of remaining funds for Control Period 5 (CP5) could lead to Network Rail delaying more renewals work until CP6 begins.
In its annual assessment, the ORR said Network Rail’s budget “remains tight” for the final year of CP5 (2014 to 2019), with just £100M to cover unforeseen costs in 2018 to 2019. As a result the ORR has said that it is more likely that Network Rail will have to defer renewals work to CP6 (2019 to 2024).
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