Media centre

Thursday 9 Jun 2011

DRIVING AN EFFICIENT RAILWAY: NETWORK RAIL’S FULL YEAR RESULTS 2010/11

Region & Route:

National

Network Rail continued to make steady progress in reducing its costs and remains on target to achieve the challenging efficiency savings set out for its current funding period – control period 4 (CP4) – which runs from 2009-2014. In real terms, it has reduced the costs of running the railway by £400m in the year and around £600m since the start of CP4.

Group finance director, Patrick Butcher, said: “The findings of the government-commissioned McNulty value for money review show that there are clear opportunities for the whole industry to make further savings in the costs of running the railway. The message is clear: the rail industry simply has to become more affordable for the users of the railway network and for taxpayers.”

Network Rail has taken a number of significant steps during the year in pursuit of delivery beyond our regulatory targets and to position the company for the longer term ambition set out in the McNulty review.

Financial highlights

• Revenue was £5,712m (2009/10 : £5,668m)
• Operating profits were £2,028m (2009/10 : £1,981m)
• Profit after tax was £313m (2009/10 : £284m)
• Capital expenditure was £3,997m (2009/10 : £3,920m)
• Net debt at year end was £25,049m (2009/10 : £23,838m)
• Gearing ratio (debt to regulated asset base) was 63.4% (2009/10 : 63.9%)

 

Efficiencies

• Operating costs, excluding depreciation reduced to £2,467m from £2,546m
• Staff costs fell to £1,734m from £1,746m. Staff numbers fell to 35,606 from 37,153 although average salaries rose by 1.5%.
• Operating and maintenance costs per train mile in real terms have fallen by 77p to £7.61 during the last year – down from £11.64 seven years ago
• An example of how efficiency has been improved is that better use of high-output plant has reduced the cost of track renewal by 6.5%
• The maintenance division was restructured, saving over £100m pa

Performance results

• In 2010/11 90.9% of passenger trains ran on time down on the 2009/10 figure of 91.5%
• The drop in performance was mainly as a result of the severe winter weather

 

Projects

There has been further progress in the number and scope of vital enhancement projects Network Rail is managing, to add capacity to the railway and drive economic growth. Some highlights include:

• Airdrie to Bathgate – a new line built in Scotland, opened in December 2010
• A new station building was opened at Newport
• The programme of work for the London 2012 Olympics is largely completed. This includes new lines, new stations and better facilities on the North London Line and East London Line, in addition to works to support the transport links being developed in the Stratford area
• The new concourse building at King’s Cross is nearing completion and will open in Spring 2012
• Construction is well advanced on the Thameslink programme – major milestones completed included the track switch at Blackfriars and the installation of the Borough High Street viaduct
• Major milestones have been completed on the Reading project including the Caversham Road bridge replacement
• The Birmingham Gateway project is making good progress – a deal was signed to build a new John Lewis store at the site – this brings £100m of third-party funding
• Preparatory work on electrification schemes in the north west and on the Western route has started

Mr Butcher concluded: “This is a moment of great potential for the rail industry, where real reform for the benefit of user and taxpayer is a genuine possibility. Network Rail has been in the vanguard of change over the past year and will continue to drive for rapid, safe evolution. Examples of our initiatives include moving decision making closer to our customers, partnering with key industry players and setting up the potential for greater competition as a stimulus to further improvements in performance. There can be no turning back for reform – the key question we face is how to deliver at an ever increasing pace.”