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Network Rail announces £37.5bn strategic business plan

Network Rail has submitted its strategic business plan to the Office of Rail Regulation (ORR) on how it hopes to spend £37.5bn on running and expanding Britain’s railways between 2014 and 2019.

Spending between 2014 and 2019 - known as Control Period 5 - includes measures to increase the number of passengers by 225M per year on 355,000 more trains as well as 20% extra morning peak seats to London and 32% extra to England and Wales’ large regional cities. It also plans for the railways to carry 30% more freight than today.

Plans are in place to future-proof 30,000 bridges, embankments and tunnels against flooding and changing weather patterns; cut CO2 emissions by 37% per passenger; modernise signalling equipment from 800 signal boxes to 14 major operations centres and introduce hundreds of miles of electrified railway. This is planned while maintaining record levels of performance, becoming the safest in Europe by reducing risk at level crossings by 8%. And reducing the public subsidy and the cost of running the railway by 18%.

The plan will require Network Rail’s net debt to skyrocket from £28bn today to £49bn by the end of CP5. The plan says financing investment on this scale will be “a significant challenge”, particularly if the continuing difficulties in financial markets persist.

ORR is taking stakeholder comments on the plan until 19 February. It will will give a final decision on 31 October 2013 with Network Rail producing its finalised plan in March 2014.

Major projects in the next Control Period include:

- Rebuilding Reading station - £900M

- Development of Birmingham New Street station - £600M

- Northern Hub - £560M

- Electrification of Great Western and Midland Main Line including new rolling stock

- Supporting High Speed 2

- Borders Rail - £300M

- £200M investment in Strategic Freight Network

The Civil Engineering Contractors Association (CECA) welcomed the plan, highlighting the potential benefits of increased levels of investment on Britain’s rail network. The plan includes £16bn of investment in rail infrastructure. Civil engineering expenditure would rise by more than £500M, jumping 30% from £1.718bn in Control Period 4 (2009-2014) to £2.238bn in Control Period 5 (2014-19).

“Britain’s rail network - much of which currently runs at or over-capacity - is attracting an all-time level of demand, and this demand is projected to grow significantly over the course of the decade. It is therefore crucial that steps are taken to meet this rise, while achieving the correct balance between capacity, cost and performance,” said CECA director of external affairs Alasdair Reisner. “Network Rail’s Strategic Business Plan identifies crucial areas in which investment is necessary, such as increased electrification and investment in station upgrades, if Britain is to boast a world-class rail system.

“CECA therefore hopes that, following robust analysis, the Office for Rail Regulation will be able to support Network Rail’s spending plans to the fullest extent possible,” he said.

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