Network Rail remains less efficient than comparable European railway operators, the rail regulator said yesterday
The Office of Rail Regulation (ORR) said that in the last year, Network Rail made a 3.6% efficiency improvement in its operating, maintenance and renewals work during 2009-10, compared to 2008-09.
But, in international efficiency benchmarking data, Network Rail is between 34% and 40% less efficient than its Continental counterparts. This is a similar gap in to that found when the ORR reviewed Network Rail’s performace in 2008.
Inefficient processes for awarding contracts to renew old railway track, were among the reasons for the efficiency gap, said the regulator.
Network Rail must become 21% more efficient by the end of the current regulatory period, in March 2014, according to targets set by the ORR.
“Given the current economic climate, it is absolutely critical that the rail industry makes every penny count,” said ORR chief executive Bill Emery.
“Our efficiency report shows that Network Rail is making progress towards achieving its target of at least 21% efficiency savings by 2014. This is encouraging. But the company still has much to do in the remaining years of the control period to meet our expectations.”
The ORR’s 2009-10 efficiency and financial report also shows that Network Rail received £5.8bn in income. This was mainly from track access charges paid by train operators and from network grant paid by the Government. It spent £6.5bn operating and improving the network.
The report will be submitted to Sir Roy McNulty’s government commissioned rail value for money study, which is looking at ways to reduce costs across the entire rail sector.
Initial findings from his review will be outlined in the Government’s forthcoming Comprehensive Spending Review, with the final recommendations expected in March 2011.