THE 1999 Network Management Statement which Railtrack is required to publish each year suggests that total spending on Britain’s national network in the 10 years from April 1 1999 to March 31 2009 is expected to reach £27·1bn. This is 64% higher than the £16·5bn foreseen in the 1998 NMS. Achievement of this spend will require substantial borrowing, and ’partnership’ agreements with train operators whereby they agree to fund improvements through higher track charges and share revenue gains with Railtrack.
Surprisingly, maintenance expenditure goes up by 15% to £6·3bn despite the fact that investment in asset renewals is also pitched 28% higher at £10·1bn. The philosophy expounded by Railtrack in the months after it was privatised in May 1996 was that accelerated renewals expenditure would be rewarded by lower maintenance later.
Shareholders will be concerned to note that the £500m average annual maintenance spend in the last 4 years of the 1998 plan has become £610m in the 1999 NMS. Allowing for inflation, this represents a real increase of almost 20%. Some of this uplift may be attributed to expectations of higher freight traffic; the high-growth scenario in the NMS would see last year’s 43 billion gross tonne-km rise to 108 billion by 2007.
The biggest jump of all has been in investment to enhance the network; this rises from £3·1bn in the 1998 NMS to £10·7bn, an increase of 345% in the space of 12 months.
Railtrack is obliged to fund maintenance and renewals out of track access charges, which are subject to regulation. Enhancement investment, in contrast, has been classified under four headings:
Committed spending (ú1·8bn) is required to complete projects that were already in progress or committed prior to April 1 1998.
Commercial schemes (ú1·4bn) do not require public funding and are funded by Railtrack, which takes the risk that the extra access charges generated will reward the investment. Examples are major elements of the East Coast main line upgrade, a £100m link from London’s Heathrow airport to the south through Staines, and £65m of enhancements between Fawkham Junction and Waterloo feeding Section 1 of the Channel Tunnel Rail Link (p285). The NMS does not cover the CTRL as such.
Partnership projects (ú3·6bn) require ’agreement with a funder for pump-priming investment before they can proceed’. The 23 projects include extra capacity on the London - Brighton line, a Heathrow Express clone running into London St Pancras instead of Paddington, and extra capacity between Coventry and Birmingham.
Contractor projects (ú2·7bn) Railtrack describes as ’generally unsuitable for us to take any demand risk although we would take appropriate construction risk’. An example is track and signalling for a proposed international freight terminal at Colnbrook, west of London.
The fact that putting funding packages together has become so complex in Britain because of the fragmented railway structure means that much planned enhancement expenditure must be regarded as highly speculative. Freight investment is especially difficult to justify because intermodal traffic in particular cannot generate higher track charges and still compete with road.
More than half of the £343m dedicated to freight enhancement is earmarked for a £193m programme to convert 2147 route-km (13% of the network) to the new W10 loading gauge. This would allow a 2·5m wide container or piggyback trailer to be carried with the top 3·9m above rail, about 180mm more clearance than is currently available on key freight routes to the Channel Tunnel.
Railtrack expects to clear London to Glasgow on the West Coast main line to W10 by the end of this year for only £2·35m. However, London to the Tunnel will cost £29m; on March 22 Railtrack applied for a government grant to support this project, and most of the planned W10 network is likely to be funded from the same source.