Media centre

Tuesday 3 Jul 2018

Record investment in improving the railway at the heart of Network Rail’s year

• Record £4.1bn spend on projects to improve the railway.
• Exceptional safety record continues.
• Reliability and performance of infrastructure assets continue at historically high levels.
• Cost efficiencies remain challenging.
• Train performance below industry expectations owing to increased congestion and severe weather events.

A record £4.1 billion was spent on enhancing Britain’s railway last year, an all-time high, according to Network Rail’s annual report published today. The report highlights the progress being made and the thousands of projects that have been completed or are nearing completion.

In 2017/18 we had a continued focus on transforming Network Rail into a more customer-focused, cost competitive organisation. The benefits of devolution are being realised as the new structure with nine distinct businesses beds in, resulting in greater accountability with more decisions being made at a local level.

Route performance targets are now developed with train operating companies, and there are now six route supervisory boards, bringing train and track closer together to deliver for passengers.

Nearly a quarter of the UK’s total spend on infrastructure is being delivered through our railway upgrade plan, which has seen strong progress this year including:

• In January – delivered on time and on budget – the newly rebuilt London Bridge station was fully opened.

• In November the £85m Ordsall Chord project, a key part of the Great North Rail Project, was delivered on time and on budget, connecting Manchester’s main rail stations for the first time in history.

• A number of other stations across the country were opened or significantly upgraded throughout the year, including Cambridge North, Ilkeston, Kenilworth, Maghull North, and Low Moor in Bradford.

The underlying reliability and performance of our infrastructure assets continues to perform at record levels – achieving a new high in the year, up 15% on last year. But for a number of reasons, including increasing congestion and severe weather events, train performance as a whole was not as good as it should have been and the recent timetable issues have caused significant disruption to passengers.

The massive investment into Britain’s railways has seen debt rise as planned (now £51.3bn compared to £46.3bn in 16/17). This approach will be changed for our next five-year funding period to 2024 (called CP6) with investment projects being fully funded by grant and/or third party investment.

Profit before tax is lower this year (£48m compared to £483m last year) in line with expectations set out for the final years of our CP5 regulatory settlement. This is because our income is fixed by the regulator for the period and does not increase in line with the increased depreciation charges (rising owing to the big investment programme) and the increased financing costs of our borrowings. This was fully anticipated.

Jeremy Westlake, chief financial officer, said: “Britain’s railways are a vital economic driver for our country, helping to create employment and stimulate growth and housing by connecting people to jobs, friends and family.

“But our railways are congested and the huge investment in our railway, encapsulated in the railway upgrade plan, is vital to provide more capacity for services that are coming on stream now, and will continue to do so over the coming months and years.

“Track and train are working ever closer together to deliver thousands of new services. The unprecedented investment in our railway has led to significant challenges and industry has learned from the recent awful experiences that many passengers have had to endure with the new May timetable. Our focus is to fix the issues as quickly as possible and transfer the lessons into future timetable and new service introductions."

Ends

Notes to editor

• The full annual report is available to download here - www.networkrail.co.uk/annualreport