Network Rail property sell-off to fund upgrade projects

Aaron Morby 9 years ago
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Network Rail will be able to stick to most of its planned £38bn spending programme with extra investment generated from the sale of non-core railway assets.

New Network Rail chairman Sir Peter Hendy yesterday published his review into the five-year funding programme to 2019 yesterday.

Network Rail plans to raise £1.8bn from selling some of its property portfolio. The Government has also increased the limit on Network Rail’s government borrowing by a further £700m.

The extra £2.5bn should allow the vast majority of programmes and projects will go ahead for delivery by 2019. The remaining projects will be delivered after 2019 so that Network Rail remains within its funding envelope. As a result, the full programme is now
expected to be delivered over a more realistic timescale.

He said: “The extra investment secures a Railway Upgrade Plan that delivers better stations, faster, more frequent and longer trains and a safer and more reliable railway for millions of passengers and businesses.

“Working closely with the Department for Transport we have ensured that no infrastructure project has been cancelled and the bulk of the investment programme will be delivered by March 2019.

“Some projects will cost more and take longer than originally expected but we will see the job through to deliver better journeys for passengers. ”

Her added: “My review has clearly found that the original plan was unrealistic and undeliverable.

“This new Railway Upgrade Plan is a more robust and deliverable plan but it is not without its own risks and challenges which Network Rail will work tirelessly to address.”

Sir Peter’s 44-page report gives an overview of the different parts of the country and what will be delivered. An eight-week consultation by the DfT on the report’s findings will start in early December.

Consistent with the recommendations in the Bowe report, the rail regulator, DfT and Network Rail will also consider a new approach to funding enhancement programmes to ensure that commitments are not made until the cost and scope of programmes is sufficiently
well developed.

The reports says that Network Rail will also need to recruit enough people on appropriate private sector salary levels so that it can develop the strong senior management capability that is needed to deliver the required improvements.

 

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