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Rail regulator sets out Network Rail funding and outputs for 2014-19

31 Oct 2013

UK: On October 31 the Office of Rail Regulation published its final determination of infrastructure manager Network Rail's funding and what it must deliver in Control Period 5, which runs for five years from April 1 2014. ORR said the £38·293bn plan is designed to deliver 'better performance, more capacity, and greater efficiencies' with 'stretching but deliverable targets'.

The final determination is part of the Periodic Review 2013 process which determines the outputs that Network Rail must deliver, their efficient cost and the access charges that can be levied.

'With increased levels of funding in vital areas such as safety and closer monitoring from the regulator, we expect Network Rail to build on past successes and beat the challenges we have set', said ORR Chief Executive Richard Price.

Key points

ORR puts Network Rail's total operating expenditure at £13·367bn in 2014-19, plus capital expenditure of £24·925bn comprising £12·107bn of renewals and £12·818bn of enhancements. Of the enhancements, projects totalling more than £7bn do not yet have clear delivery plans or costs, and Network Rail has until March 2015 to develop these.

ORR requires the costs of day-to-day running of the network to be reduced by around 20% to bring it 'up to the standards of the most efficient in Europe'. This would be achieved through new technology, better management of the network and more efficient ways of working.

Funding dedicated to eliminating level crossings has been increased from £32m in ORR's draft determination to £109m, with around 500 crossings to close and hundreds more to be improved. There is also £250m for new equipment and working practices to improve track worker safety.

ORR has allocated an extra £571m to upgrade structures such as bridges and tunnels.

There will be a new regulated target for long distance services, with fewer than three in 100 trains on the West Coast Main Line and around four in 100 trains on the East Coast Main Line to be cancelled or delayed by more than 30 min by 2019.

ORR will set new regulatory targets for asset management, aiming to move from 'find and fix' to 'predict and prevent'. There will also be additional checks to monitor progress on making the network more resilient to bad weather and climate change.

Periodic Review 2013 process

May 2011ORR begins consultation on Control Period 5 plans.
Summer 2012UK and Scottish governments published High-Level Output Specifications outlining what the railway is required to deliver in CP5.
January 8 2013Network Rail published Strategic Business Plan for CP5.
February 19 2013Last day for ORR to receive comments on the Strategic Business Plan.
June 2013ORR published draft determination setting out how much money it believes Network Rail will need to deliver the proposals.
October 31 2013ORR publishes its final determination.
December 2013Network Rail to publish draft delivery plan for consultation.
December 20 2013ORR to start the formal implementation of PR13.
February 7 2014Last date for Network Rail to object to the final determination. If there is an objection, ORR can issue a revised notice or refer the dispute to the Competition Commission.
March 31 2014Last date for Network Rail to publish final delivery plan.
April 1 2014Start of Control Period 5.
March 31 2019End of Control Period 5.