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More government grants for Network Rail


RAIL REGULATOR Tom Winsor last week accepted a proposal by Network Rail and the Strategic Rail Authority (SRA) to reduce the amount of money raised by track access charges.

Instead the government will boost the amount of direct grant it pays to Network Rail to operate, maintain and renew the railways.

The change will see the government paying directly for almost half of rail funding every year for the next five years. This compares to Winsor's proposal last December that Network Rail's funding from grants in 2004 should be only 29%, falling to zero by 2008.

Network Rail plans to spend £21.45bn over the five years to 2009. This will now be made up of £9.35bn from government grants and £8.96bn from access charges paid by the train operators between 1 April 2004 and 31 March 2009.

Network Rail will borrow an extra £3.14bn to complete the funding package.

Winsor was concerned that the new reliance on direct government grant would harm Network Rail's independence.

The new agreement will see SRA control over Network Rail's strategy cut and give it less influence over decisions such as developing property, awarding management bonuses and loans.

'Network Rail has proved that it can work efficiently and operate successfully, ' said a Network Rail spokesman.

SRA would not comment on the change in its role.

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