ORR welcomes Network Rail’s strategic business plan

1 November 2007
ORR/29/07

The Office of Rail Regulation today welcomed publication by Network Rail of its strategic business plan (SBP).

The SBP is Network Rail’s plan for operating, maintaining, renewing and enhancing the rail network for the five years from 2009-10 to 2013-14. It is Network Rail’s principal submission to ORR’s periodic review of Network Rail’s outputs, expenditure and access charges.

The SBP also responds to the high-level output specifications for the railway set out by the Secretary of State for Transport and Scottish Ministers in July 2007. It sets out Network Rail’s contribution to achieving the two high level output specifications and the likely needs of rail passenger and freight customers and the public sector funders of the railway.

Bill Emery, ORR Chief Executive, said: “The industry has made good progress over the last five years. Performance is improving, costs are reducing and passengers and freight customers are returning to the railways. We will be looking at how Network Rail’s strategic business plan seeks to maintain these improvements and sets out how the company proposes to develop during the next regulatory control period.

“We will now begin a thorough review of the plan. We will be looking for the plan to contain further significant improvements in performance and efficiency as well as providing a fuller justification for its activities and expenditure than it contained in its initial strategic business plan last year. Our assessment of the SBP will continue until June 2008, when we expect to publish our draft determinations on the company’s outputs, expenditure and access charges.

“Ahead of that we will publish our initial assessment of whether we consider the output requirements of the HLOSs can be funded by the sum put on the table by the two Governments in the light of Network Rail’s proposals.

“We are keen to receive the views of interested parties’ on the SBP. We would like to hear from stakeholders on whether the industry plan represents a realistic and efficient way of meeting  their specific interests and the needs of rail users and funders.”

Notes for editors

1. ORR’s 2008 periodic review (PR08) will determine Network Rail’s outputs, revenue requirement and access charges for control period 4 (CP4) which will run from 1 April 2009 to 31 March 2014. More information on the periodic review process can be found at: http://www.rail-reg.gov.uk/server/show/ConWebDoc.7596.
2. The SBP has been produced in response to ORR’s advice to ministers and framework for setting access charges document, which set out ORR’s requirements for the plan. This document was published on 28 February 2007, and is available on the ORR website at http://www.rail-reg.gov.uk/upload/pdf/316.pdf.
3. The Secretary of State for Transport and Scottish Ministers set out what they expect the railway to deliver in their high level output specifications (HLOSs) and the amount of funding available in the statements of funds available (SOFA)s. The Secretary of State published her specification and statement on 24 July 2007 as part of her ‘Delivering a sustainable railway’ white paper. Scottish Ministers published their specification and statement on funding on 13 July 2007.
4. In December 2007 ORR intends to publish its initial assessment of whether the HLOSs and SoFAs “match”. If there is a mismatch then ORR will trigger the iterative process set out in the Railways Act and request either one or both of the Governments to resubmit their HLOSs or SOFAs.
5. ORR’s consultation letter on the SBP, published today, is available on the ORR website at http://www.rail-reg.gov.uk/upload/pdf/cons-NR-sbp.pdf

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ORR Press Office – 020 7282 2188/2007