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Rail: Air rights are back

William Gard

While we all grapple with the implications of the latest National Infrastructure Plan, National Policy Statements and the Infrastructure Bill, which had its first reading in Parliament last week, we are seeing more imagination, interest and value in projects on the UK’s rail transport estate.

One example we were considering recently is the greater use of railway land at stations for developments beyond transport. This is perhaps partly a function of the huge, and growing, footfalls passing through these sites daily. There were over 400M journeys on the network in the third quarter of 2013/14 alone - the highest in modern times.

All regular travellers will be familiar with the retail complexes being redeveloped at Birmingham and the positive influence of King’s Cross and St Pancras. However, new station complexes are also arising through Crossrail and development on the classic heavy rail network. Substantial redevelopment works are planned or being completed at major stations such as Bristol Temple Meads and Reading, which Network Rail took back from operators in April 2014, and at Newcastle and York which will be taken back as part of the East Coast refranchising in 2015.

Network Rail’s approach to such works is increasingly positive. The Office of the Rail Regulator (ORR) requires Network Rail to make more money from its Regulated Asset Base (and meet McNulty efficiency requirements

Its recent management approach has been to grasp this challenge with a more commercial eye. As land values continue to climb, schemes that were once untenable are becoming profitable for Network Rail, developers and local authorities. The investment of £38bn in the network over the next five year control period must go somewhere.

One option is more “rafting” over live lines. Rafting in itself is not new. Broadgate in the City was created from exactly this structure in the late 1980s.

However, engineering advances combined with a change in direction from Network Rail may make such schemes more prevalent, particularly in the context of the improving economy. Due to safety and asset ownership issues, Network Rail will continue to be closely involved in these projects. However, its willingness to engage with proponents and new schemes is unlocking some well-connected inner city sites.

All this is in addition to developments arising from High Speed 2 (HS2). HS2’s land acquisition powers are formidable and include the purchase of land simply for the purpose of exploiting its value for development in non-transport projects where land values rocket due to new HS2 stations, the footfall will be used by HS2 to fund its underlying build costs.

Projects in and around the rail estate bring with them particular risks and complexities. Railways and roads must remain safe and operational during and after development work. The proper application of regulated connection contracts, station lease arrangements and other specific regulations for the transport industry will often be important factors in the viabilty of a development.

  • Will Gard is a chartered civil engineer and a partner at Burges Salmon

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