Rail Regulator identifies substantial savings on planned rail infrastructure costs

24 July 2003
ORR/14/03

The Rail Regulator, Tom Winsor, has today published a major document setting out his emerging conclusions from the work that he is doing in his review of Network Rail's funding requirements, which he is due to complete in December 2003.

Mr Winsor said: "The document that I am publishing today identifies a series of areas where I believe that Network Rail should be spending significantly less money over the next five years than the company has set out in its latest business plan. This emerging view has been informed by extensive and detailed work carried out in partnership with Network Rail, though a great deal remains to be done before I reach my final conclusions in December.

"The potential for savings that I have identified come both from probing:

• the rationale for the volume and timing of the maintenance and renewal activity that Network Rail needs to undertake to maintain the capability of the network; and
• the scope for Network Rail to become much more efficient in the way it identifies, specifies and delivers the work that needs to be done.

"My analysis suggests that Network Rail's management should be able to achieve more than their latest plan suggests to address the inefficiencies introduced into the business before and during the period that its predecessor, Railtrack, spent in administration. A key issue for the coming months, as flagged up in my consultation document, is the need to identify the pace at which improvements can be delivered.

"I am today asking Network Rail to incorporate my findings into its business plan and to produce a revised set of expenditure projections in the autumn. I am also asking Network Rail to evaluate options for improving the efficiency of the West Coast route modernisation project.

"It is vitally important for the whole industry, and for the country, that Network Rail's management build swiftly on the progress they have made in the last nine months and take the opportunity to show that Network Rail can deliver a safe, reliable, efficient and affordable railway".

Notes to Editors

1. The Regulator is conducting an interim review of the level of track access charges, payable by franchised passenger train operators, needed to fund its activities in the operation, maintenance and renewal of the national railway infrastructure in a manner that will efficiently meet the reasonable requirements of its train operator customers, in accordance with the terms of its network licence. The review commenced in November 2002 and is due to complete in December 2003, with any revision of access charges found necessary coming into effect from April 2004.
2. The third consultation document - The interim review of track access charges: Third consultation paper published on 24 July 2003 is available here.
3. Also published today is a further document in this series - The interim review of track access charges: West Coast Route Modernisation : Provisional conclusions. This document sets out:
   1. the background of the West Coast Route Modernisation (WCRM) project, latest requirements and plans for delivery;
   2. the Regulator's functions and duties with regard to the WCRM project;
   3. the findings of his consultants Booz Allen Hamilton;
   4. potential options for the way forward; and
   5. proposed next steps, including the Regulator's proposed future regulatory approach to the WCRM project.
4. The second consultation document The interim review of track access charges: Second consultation paper: The incentive and financial framework published on 13 February 2003 is available here.
5. The first consultation document The interim review of track access charges: Initial consultation paper published on 15 November 2002.
6. The statement Network Rail: Interim review of access charges, published on 25 September 2002, is available here.
7. The documents are also available from Sue MacSwan, ORR Librarian, 1 Waterhouse Square, 138-142 Holborn, London EC1N 2TQ. Tel: 020 7282 2001; fax: 020 7282 2045; email: rail.library@orr.gsi.gov.uk

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