ORR signals tougher regime for Network Rail

14 February 2008
ORR/05/08

The Office of Rail Regulation today set out how it will hold Network Rail to account for meeting tough new targets and delivering a better value for money railway as part of its Periodic Review process.

ORR has provided an update on how it will determine Network Rail’s outputs and access charges for the five years from April 2009. It is establishing a framework to drive Network Rail to deliver cost effective and sustained improvements in safety, performance and capacity to the benefit of passengers and freight customers, both at national level as required by Governments in England & Wales and Scotland and at local level to meet the reasonable requirements of train operators. There is also more detail on the ongoing assessment of Network Rail’s business plan, including ORR’s views on efficiency.

Bill Emery, ORR Chief Executive, said: "Today’s publication represents an important milestone in our review of Network Rail’s access charges and outputs. We are setting out details of how we will hold the company accountable for delivery of the specifications set by government and of the needs of its customers.

“The objectives of this review are for Network Rail, working with its industry partners, to deliver a railway that is safer and more reliable than ever, while carrying ever more passengers and freight at a cost that represents ever better value for money for rail users and taxpayers. We will be establishing a wider range of obligations on Network Rail, filling in important gaps in the current suite of regulatory output requirements. Network Rail will be required to meet new targets on the amount of time the network is available to run train services and, for the first time, specific five-year targets for improvements in reliability for individual train operators – all of which will be enforced by ORR.”

ORR sets out further details of how it will assess Network Rail’s efficient level of access charges and establish the incentive framework within which Network Rail and its industry partners will operate in the next control period.

Bill Emery continued: “Our initial review of Network Rail’s business plan leads us to believe the company can make significantly greater efficiency savings than those assumed in its present plans, without affecting delivery of the railway the nation requires. We expect the company to respond to this challenge.”

Notes for editors:

1. Update on the framework for setting access charges and strategic business plan assessment” is published by ORR and is available on the ORR website at http://www.rail-reg.gov.uk/upload/pdf/351.pdf.
2. Governments in England & Wales and Scotland published their respective high level output specifications (HLOSs) and statements of funds available (SOFAs) in July 2007. Network Rail responded to the HLOSs by producing an industry strategic business plan (SBP) at the beginning of November. Network rail is now due to release its updated strategic business plan in April 2008. ORR expects to publish its completed determinations on this in June 2008.

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