The Future Shape of Network Rail

18 March by Lisa Newman


A review into how to improve the performance and funding position of Network Rail entitled 'The future shape and financing of Network Rail' was published alongside the budget this month (16 March).

Nicola Shaw the chief executive of the HS1 line in south-east England, was commissioned to carry out the independent study by the government last year, after the taxpayer-owned operator admitted it would miss several deadlines and far exceed budget on a number of projects that are part of a £38bn upgrade programme.

Having initially said she could not rule out recommending privatisation, Shaw's final report, dismissed a full-on selloff. However, the report still calls for significant changes, including attempting to bring in more private sector involvement and financing, the report states; "Further options for involving private sector finance – for example, from letting a concession, or involving suppliers in technological investment – should be explored to release Government capital, encourage innovation, and speed up delivery of improvements for passengers."

Giant infrastructure investors, such as; Cheung Kong Infrastructure (CKI) the investment vehicle of the Hong Kong billionaire Li Ka-Shing and Global Infrastructure Partners (GIP) the New York-based owner of Gatwick Airport , have expressed interest in bidding for concessions.

CKI  already owns the British rolling stock company Eversholt Rail, which it acquired in a £2.5bn deal last year and therefore could be a strong contenter.

Local funding options are also highlighted in the report recommendations; " Routes also be required and empowered to find local sources of funding and financing, including from those (such as local businesses or housing developers, for example) who stand to benefit from new or additional rail capacity."

The report gives support to HS2, which will remain a separate organisation but be able to draw on the system operator for access planning and timetabling in particular and goes on to state that "Network Rail should also work closely with other integrated transport authorities, city regions, and London, as funding and delivery models evolve."

Read the full report

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