Thursday 5 Feb 2004
NETWORK RAIL ACCEPTS FINAL CONCLUSIONS OF INTERIM REVIEW
- Region & Route:
Network Rail today formally accepted the Office of the Rail Regulator’s final conclusions of the Interim Review of track access charges. The Rail Regulator has determined that Network Rail’s expenditure on operations, maintenance and renewals over the next five years (Control Period 3) should be £22.2 billion. The settlement will provide Network Rail with secure, predictable revenues and put railway finances on a stable long-term footing.
The final conclusions are based on extremely challenging targets for improvements in efficiency and performance.
Network Rail recently announced the best quarterly performance for four years – a 26% reduction in delay minutes in the final three months of 2003. Total delay minutes for October – December 2003 were 3.3 million compared to 4.4 million in the same period the previous year. The future performance trajectory implies significant additional improvements in order to meet the overall targets in the next control period.
In terms of cost savings, the ORR has assumed efficiencies of more than 30% by 2008/09, and savings of 37% and 43% for 2007/08 and 2008/09 in respect of the West Coast Route Modernisation project. Network Rail is determined to deliver these targeted efficiency savings and is working to identify all the actions necessary to deliver the full savings.
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Review - 2
The company is continuing its discussions with the SRA and ORR on the balance between grant and track access charges that make up its income. Network Rail’s accountability to its customers and the Regulator, which have been clarified and reinforced through the review, would not be changed as a result of any proposed unconditional grant.
Network Rail is also discussing proposals to reprofile an element of its revenue over the next two years. The company will submit its proposals to the Regulator around the end of February.
Commenting on the Board’s decision to accept the final conclusions, Ian McAllister, Chairman, said: “By accepting the Regulator’s final conclusions, Network Rail has committed itself to unparalleled improvements in performance and efficiency. In return we have gained certainty, stability and visibility regarding our future income.
“We face a significant challenge to deliver the scale of efficiencies demanded by this settlement. This will require change in every aspect of our activities. We have already begun this process and there can be no turning back.
“Network Rail’s performance is already showing welcome signs of improvement. We must now build on these visible signs of improvement and achieve sustained high levels of punctuality.”
About Network Rail
We own, operate and develop Britain's railway infrastructure; that's 20,000 miles of track, 30,000 bridges, tunnels and viaducts and the thousands of signals, level crossings and stations. We run 20 of the UK's largest stations while all the others, over 2,500, are run by the country's train operating companies.
Every day, there are more than 4.8 million journeys made in the UK and over 600 freight trains run on the network. People depend on Britain's railway for their daily commute, to visit friends and loved ones and to get them home safe every day. Our role is to deliver a safe and reliable railway, so we carefully manage and deliver thousands of projects every year that form part of the multi-billion pound Railway Upgrade Plan, to grow and expand the nation's railway network to respond to the tremendous growth and demand the railway has experienced - a doubling of passenger journeys over the past 20 years.
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