Statement on Network Rail’s debt issuance programme

01 October 2004
ORR/40/04

The Office of Rail Regulation (ORR) has today published a statement on Network Rail’s forthcoming long-term debt issuance programme (DIP). The statement sets out details of ORR’s assessment of Network Rail’s proposals.

Chris Bolt, Chairman of ORR said:
“We recognise that Network Rail’s long-term financing plan, which will be supported by a financial indemnity provided by the Government, offers the company an opportunity to raise new debt finance at a lower cost than would be possible under a conventional financing structure. The recent and proposed licence modifications will protect customers and funders from any possible disadvantages from the new structure. This will benefit the railway industry as a whole at a time when there is considerable pressure on railway finances.”

Network Rail’s licence was modified in July 2004 to add a new licence condition limiting the company’s borrowing, and a series of changes to the ring-fencing provisions to ensure that this safeguard is extended to Network Rail’s financing vehicle, Network Rail Infrastructure Finance (NRIF), thus preventing NRIF from using revenues in ways in which Network Rail would be prohibited.  Due to Network Rail revising its DIP proposals since then from a securitisation to a non-securitisation structure, a change to the definition of NRIF in the network licence is required to make the July 2004 licence modifications effective.

Network Rail has agreed to the licence modification making this change and a formal notice under section 12(2) of the Railways Act 1993 has been issued today.

Notes for editors

1. The consultation period on the proposed licence modification closes on Friday 29 October 2004.

2. ORR’s Statement on Network Rail’s debt issuance programme is available from the ORR website at http://www.rail-reg.gov.uk/upload/pdf/212.pdf and also available from the ORR Librarian, Sue MacSwan, 1 Waterhouse Square, 138–142 Holborn, London EC1N 2TQ, tel: 020 7282 2001, fax: 020 7282 2045, e-mail: rail.library@orr.gsi.gov.uk.

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