NETWORK RAIL'S decision to underspend by more than £500M in the last financial year largely by deferring work has been rubber-stamped by the rail regulator.
An Offi ce of Rail Regulation (ORR) investigation into Network Rail's fi nances has found that the rail operator spent £527M - or 12% - less than planned last year.
Deferred renewal projects made up £362M of the underspend, 80% of which was in signalling work. Efficiency savings made up the remaining £165M.
Network Rail told NCE in February that it was heading for an £850M underspend (NCE 3 February). This prompted the rail regulator to announce an investigation into the rail operator's performance.
The regulator has now concluded that despite the underspend, Network Rail had achieved its operation, maintenance and renewal targets. But it warned Network Rail would have to ensure it had 'sufficient management and financial resources' to deliver the deferred work later.
Network Rail countered the regulator's statement with its own announcement that it would spend £2bn between now and 2009 on major signalling renewals projects.
'It's not like we're sitting on a pile of cash now - we've got the basics in place and are now going into more ambitious investments, ' said a spokesman.