HS2

11.11.16

Economy ‘double whammy’ means rail investment still safe under Brexit

There are no signs that rail investment will slow down as a result of Brexit because it is related to the UK economy rather than to whether we’re in or out of the EU, a senior Network Rail figure has said.

Speaking to delegates at yesterday’s inaugural Northern Powerhouse Rail Conference, Andy Haynes, the infrastructure owner’s contracts and procurements director for Route Services, emphasised that the UK is the country which most invests in railways in Europe “by what looks like quite a long way”.

“The main funder at the moment, DfT, recognises that investment in the railway stimulates the economy through money and through services, infrastructure and infrastructure activity – and the conversion of that into extra capacity, reliability and train services then allows the rest of the economy to be stimulated,” he argued.

“So it’s a double whammy. Investing in the railway is good in itself. Efficient spend is good in itself. And the product of that, a better railway service, then further stimulates the railway.”

As long as the industry can convert what is “at the moment” government investment in the railway into “predictable benefits for the travelling public”, then the UK will continue leading the way in European rail investment, Haynes added.

“I don’t see any sign of that slowing down at all, because the equation isn’t related to whether we’re in or out of the EU; it’s about driving the economy for the UK. And if anything, as things might become uncertain elsewhere, this ought to be one certain place for the government to put their investment,” he said. “I think that the opportunity in rail is secure.”

But like many other speakers at the conference, which included a day-time supply chain-focused exhibition and a networking dinner, Haynes indicated that investment in rail might have to start coming from private sources going forward.

“What the government wants to introduce is this idea that there is a connection between investing in the railways and the return you get out of it,” he continued.

“So the DfT don’t want to be the only funder of rail; we must find different commercial mechanisms of getting investment in and connecting the return those investors get from the successes of that improved railway.”

The subject of Brexit later came up during a Q&A session at the TransCityRail North dinner, which included panellists from HS2 Ltd, Arriva Rail North, Alstom, Transport for the North and Network Rail.

Asked by the event host, BBC’s Richard Westcott, how the vote to leave the EU would affect the rail network, Alex Hynes, managing director of Arriva Rail North, argued the biggest issue for his own business was the impact it has on uncertainty for the economy and confidence in spending. He added that the uncertain economy could affect people’s decision to travel, which in turn damages the operator’s revenue and the investment made in its routes as a result.

But Duncan Sutherland, HS2 Ltd’s non-executive director, also argued that Brexit offers an opportunity to streamline procurement processes, which in turn would accelerate the time it takes to deliver infrastructure projects. He also highlighted the opportunity to boost skills and innovation domestically, which companies have previously said are at risk as a result of Brexit, and to increase the UK’s level of rail product exports.

Despite Sutherland’s optimism, several bodies have argued that HS2 is at risk as a result of the Leave vote, with even the company’s director of finance and operations admitting he is “worried” about the long-term impact of Brexit on the project. The head of the National Audit Office has also warned that balancing HS2 with other major projects will be more challenging than ever in the current climate.

Comments

Lutz   12/11/2016 at 11:42

There certainly will be changes. There will be a shift economic emphasis and priorities; this will feed through the changes in the planned projects. The comments also ignore the impact that the changes in the value of Sterling (and again after the USA elections) will have on costs; these will start feed through the supply chain. NR needs to be on-top of this, because without additional funding, there will be a need for further postponements. One key point to also be aware of; the details of the autumn statement have not been announced; the rise in Sterling over the last few days has come too late cover the impact of financial forces hitting the UK throughout this last year. There is a big funding gap, and extra borrowing may be a short-term fix, but we must now expect a sharp rise in interest rates which will affect our capacity to borrow and fund the national debt. So you know what's coming, despite all the good intentions.

Add your comment

 

related

rail technology magazine tv

more videos >

latest rail news

Rail depot transformed into hand sanitiser bottling plant

03/04/2020Rail depot transformed into hand sanitiser bottling plant

The Southern Railway team has converted one of its depots into a hand sanitiser bottling plant as they work to meet the needs of colleagues on th... more >
Iconic Glenfinnan viaduct turns blue for the country’s NHS heroes

03/04/2020Iconic Glenfinnan viaduct turns blue for the country’s NHS heroes

The viaduct, which you can see in the Harry Potter series of films, joined other famous attractions and venues like Glasgow’s SSH Hydro in ... more >
Network Rail announces cashflow boost for suppliers

02/04/2020Network Rail announces cashflow boost for suppliers

During the coronavirus crisis, Network Rail is awarding thousands of British firms a crucial boost to their cashflow, by declaring a move to imme... more >

editor's comment

23/01/2018Out with the old...

Despite a few disappointing policy announcements, especially for the electrification aficionados amongst us, 2017 was, like Darren Caplan writes on page 20, a year generally marked by positive news for the rail industry. We polished off the iconic Ordsall Chord (p32), hit some solid milestones on Thameslink (p40), progressed on ambitious rolling stock orders (p16), and finally started moving forward on HS2 (p14) ‒ paving the way for a New Ye... read more >

last word

Encouraging youngsters to be safe on the railway

Encouraging youngsters to be safe on the railway

This summer, Arriva Group's CrossCountry and the Scout Association joined to launch a new partnership to promote rail safety among young people. Chris Leech MBE, business community manager at the... more > more last word articles >

'the sleepers' daily blog

Maximising efficiency requires investment in data, but it’s rewards for rail could be extensive

14/11/2019Maximising efficiency requires investment in data, but it’s rewards for rail could be extensive

Rail Technology Magazine’s Matt Roberts explains the significant role data can play within the future development of the rail industry. Standing as a cornerstone of the UK transport network, the rail industry is forever striving to innovate and maximise efficiency in all aspects of its work. Data is just one such way of achievi... more >
read more blog posts from 'the sleeper' >

comment

The challenge of completing Crossrail

05/07/2019The challenge of completing Crossrail

With a new plan now in place to deliver Crossrail, Hedley Ayres, National Audit Office manager, major projects and programmes, takes a look at ho... more >
Preparing the industry to deliver trains for the future

04/07/2019Preparing the industry to deliver trains for the future

The move to decarbonise the rail network involves shifting to cleaner modes of traction by 2050. David Clarke, technical director at the Railway ... more >
Sunshine future beckons for South Wales Railways, says 10:10 Climate Action’s Leo Murray

02/07/2019Sunshine future beckons for South Wales Railways, says 10:10 Climate Action’s Leo Murray

Smart electrification is the way to boost clean energy resources, argues Leo Murray, director at 10:10 Climate Action. Contractors are clear... more >
Ambition doesn’t have to be expensive, says Midland Connect's Maria Machancoses

02/07/2019Ambition doesn’t have to be expensive, says Midland Connect's Maria Machancoses

The TCR Midlands conference is only days away and tickets are going fast for the sector event of the year at the Vox Conference Centre in Birming... more >

rail industry focus

View all News

interviews

Andrew Haines, CE of Network Rail, tells BBC News his organisation could issue future rail franchises

24/06/2019Andrew Haines, CE of Network Rail, tells BBC News his organisation could issue future rail franchises

Andrew Haines, the Chief Executive of Network Rail, has told the Today programme on Radio 4's BBC’s flagship news programme that he wo... more >