Network Rail’s Delivery Plans Broadly on Track Says ORR

The Office of Rail and Road (ORR) has found Network Rail’s progress in delivering against its Control Period 6 (CP6) plans broadly on track.

However, in its annual report the regulator did raise concerns regarding the remaining levels of risk funding, particularly in Scotland, and that continued focus is also needed to deliver renewal work.

The annual review noted that in the first two years of CP6, which runs from 2019 to 2024, remaining risk funding has reduced considerably from 2.7bn GBP (3.11bn euros | 3.82bn USD) to 0.8bn GBP (0.92bn euros | 1.13bnUSD), in part due to the impact of Covid-19.

This situation is creating some challenges across Network Rail, particularly in Scotland, where it only has 57m GBP (65.75m euros | 80.56m USD) available to fund 106m GBP (122.28 euros | 149.85m USD) of identified risks. Network Rail Scotland is currently considering changes to its plans to fund this potential gap.

While Network Rail remains broadly on track to renew the railway, some work – such as signalling and telecommunications – has been put back towards the end of CP6, and the ORR has emphasised the need for NR to effectively manage deliverability risks.

Overall, the regulator believes Network Rail’s plans represent good progress towards meeting its challenge to deliver 3.5bn GBP (4.04bn euros | 4.95bn USD) of efficiency improvements over the five-year period and where improvements are needed in Scotland, that it’s taking on board its feedback.

The ORR also highlighted the importance of Network Rail being transparent about changes to its plans and their effects on safety, asset sustainability, performance, and income/expenditure.

John Larkinson, ORR Chief Executive, said:

“Network Rail has continued to deliver well in extremely challenging and changing circumstances. Work to renew the railway is broadly on track and Network Rail has listened to us and delivered its early efficiency commitments.

“The risk funding arrangements have worked well in challenging circumstances, but we are concerned that there has been a significant decrease in the remaining risk funding, which is particularly acute in Scotland. It must now set out how it will manage this position more clearly, particularly given future uncertainty.”

 

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