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Wednesday 10 Sep 2003

NETWORK RAIL RESPONDS TO ORR THIRD CONSULTATION PAPER

Region & Route:

National

Network Rail has responded to the third consultation paper published by the Office of the Rail Regulator (ORR) as part of the ongoing interim review of track access charges. In its submission, Network Rail welcomes the constructive approach adopted by the ORR and the independent consultants appointed as part of the interim review process, which is due to conclude in December. Network Rail’s document states; “we believe that there is now a high level of agreement between Network Rail and the Regulator about the overall magnitude of potential efficiency improvements and the main areas where those savings can be found.  The remaining issue [on efficiency] concerns the timing with which the identified savings can be achieved.” Commenting on proposals that renewal plans be reduced, the paper states; “we believe these changes result in a departure from what would be considered to be the minimum whole life cost approach by deferring some elements of renewals.”  And, “if the reduced level of activity was maintained beyond the next two years, this would have a significantly greater impact on asset condition and performance”. - more - ORR - 2 Four key points are highlighted in conclusion; ·        “the safety and performance challenges arising from the operation of ageing network need to be recognised and the assumed levels of maintenance and renewal activity need to be consistent with the outputs which Network Rail is required to deliver; ·        the assumed level of expenditure needs to be based on a realistic but challenging assessment of the scope for improvements in efficiency over the next few years; ·        the outstanding issues associated with the West Coast project need to be resolved so that there is clarity about what needs to be delivered from both the enhancement and renewals elements of the project and the risks to Network Rail are clearly limited; and ·        the review needs to deliver key financial ratios which are sufficiently robust to enable the business to finance its relevant activities.” Network Rail will be providing a further cost submission to the Regulator later in September which will also serve as Network Rail’s response to the Strategic Rail Authority’s Draft Network Output Specification consultation document.