Network Rail must cut £2bn from spending plans, says regulator

[Metrailway]

From the Guardian:

Network Rail must cut £2bn from spending plans, says regulator

Office of Rail Regulation says track operator can manage railway more efficiently without jeopardising safety

Network Rail will have to cut more than £2bn from its spending plans over the next five years and meet tougher punctuality targets, the rail regulator has announced.

The Office of Rail Regulation (ORR) said it had identified billions in savings to be made in Network Rail's business plan, while still allowing Britain's railways to grow over the next five years. But the track operator said it had already made huge savings, while unions said cuts would worsen the service and warned of strikes if jobs were lost.

The ORR said the day-to-day running of the railway could be managed more efficiently and cheaply without jeopardising safety. It approved £12bn of investment but warned that funds would not be released until detailed plans were delivered proving value for taxpayer money. The overall total will be reduced to £37.9bn from a proposed £40.1bn, including interest payments.

(Read More)

 

[LNW-GW Joint]

The detailed CP5/PR13 documents are now on the ORR site:

Executive Summary: http://www.rail-reg.gov.uk/pr13/PDF/dd-executive-summary.pdf
Full Document (7.56MB): http://www.rail-reg.gov.uk/pr13/PDF/pr13-draft-determination.pdf

Page 17:

30. Although passenger and freight demand will be growing, Network Rail should deliver this programme while ensuring that 92.5% of trains arrive on time nationally by 2019 (as measured using PPM6), compared to 90.9% today. It will also reduce disruption to passengers and freight customers from engineering works over the control period.
31. There will be a renewed focus on improving the worst performing services, with the performance for each franchised operator in England & Wales to reach a minimum of 90% of trains on time. This will benefit customers on routes where train service reliability has been much worse than average. Network Rail and the train operators will have the flexibility to set the „trajectory‟ to reach this output. Our PR08 settlement was based on 90% being reached for all operators, with specific funding allocated, but this has not been achieved. We have adjusted Network Rail‟s finances in CP5 for not delivering performance outputs.

Although much is made of the £2billion (5%) cut against the NR plan, and the network-wide 90% minimum operational performance measure, I think it is notable that ORR and NR are mostly on the same page as regards policies and costs.
There are no flat rejections of plans or projects, just a requirement to improve efficiency and methodology.
For the first time, it doesn't look like ORR and NR will fall out about the determination.
At an operational level, it means in particular that the NR signalling concentration plan (ROCs etc) is endorsed.

Page 21:

46. Operations costs are those incurred in „operating‟ the infrastructure, such as signalling. In its SBP, Network Rail said it would need to spend £2,027m, which is £212m less than in CP4, mainly as a result of deploying new technology to change the way it runs the network. In general, Network Rail‟s analysis is well founded and we broadly agree with its conclusions which will put the company at a leading position in Europe.

It remains for NR to work out how to save £2billion without throwing a baby out with some bathwater.