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Network Rail told to spend extra £1bn including 'forgotten' Crossrail funds

Rail workers

The Office of Rail and Road (ORR) has told Network Rail to spend an additional £1bn on rail infrastructure, including £300M of Crossrail funds that Network Rail ‘forgot’ to include in its Strategic Business Plan.

In its draft review for Network Rail’s CP6 plans (2019-24), ORR said that Network Rail must spend an extra £1bn to replace old track, signals and railside equipment.

Network Rail’s budget for CP6 currently stands at £34bn with £17bn pencilled in for maintenance and renewal works.

However, ORR’s review outlines how an additional £1bn can be made available from the sale of property assets, diverting money from the R&D budget, as well as £250M-£300M expected to be generated by allowing Crossrail to use Network Rail tracks.

The Crossrail charge was left out of Network Rail’s initial Strategic Business Plan (SBP), and a Network Rail spokesperson confirmed that “it was an oversight”, while a spokesperson for ORR said that it had ‘simply been forgotten’. 

ORR is now in talks with the Department for Transport (DfT) to free up this money for Network Rail to use.

“Network Rail told us it had omitted the income from the Crossrail supplemental access charge from its Strategic Business Plan (SBP). It has estimated this at £250 - £300m depending on the cost of debt assumption,” the report read. “Our view is that this amount could be used to support further progress on improving asset sustainability.

It continued: “The DfT’s provisional view is that this money should be available to Network Rail in CP6 to deliver HLOS outputs; it will finalise its position before the final determination is published at the end of October 2018.

“Consistent with our wider conclusions on priorities for expenditure, this income can be used to support further progress on improving asset sustainability.”

Network Rail CEO Mark Carne said there are some “areas of concern” surrounding the report and hopes to iron them out with ORR before the final determination is published in October.

“Today’s draft determination is an important step in the process to finalise our plans to deliver a safe, reliable, improving and growing railway in the five years to 2024,” he said. “We welcome the regulator’s general support for our plans for Britain’s railways, delivering a more reliable service that passengers can rely on.”

He added: “We will consider the detail carefully over the coming months as there are still some areas of concern that we will need to work with ORR on before it publishes its final determination in October.”

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