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Network Rail could be broken into regions

Network Rail could be split into several regional units following a review of the rail sector according to one of its key shareholders.

Rail Freight Group chairman Tony Berkeley said that the creation of regional units would allow for cost comparisons to be made within Network Rail.

This would encourage greater efficiency.

Berkeley is one of the 73 public members who act as shareholders for Network Rail under its post-Railtrack not for profit structure.

“I think some kind of regionalisation, which would be regulated and benchmarked, would be much better than comparing with the Continent,” he said.

Berkeley said the shake-up would be a key recommendation of the government-backed McNulty review of the rail industry.

The study is examining how the industry can work more efficiently and at lower cost and will report on its findings in March.

“The government will require Network Rail to split itself up into regions, and have it so that the regulator can benchmark the costs between them, as a way to get Network Rail to reduce its costs,” Berkeley told NCE.

The Office of Rail Regulation currently compares Network Rail to European railway companies.

The most recent comparison, published on 8 September, found that Network Rail is between 34% and 40% less efficient at maintaining and renewing its infrastructure than comparable rail infrastructure managers in Europe (NCE 16 September).

The Association of Train Operating Companies has also called calls for the creation of stronger regional or route-based business units at Network Rail.
A Network Rail spokesman said change was needed and that the firm “will play its part in making it happen, while continuing to drive costs out of its business”.

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