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Hendy: Private investment needed as ‘doors shut to NR’s never ending debt’

Businesses should provide some of the investment Britain’s rail network needs to grow, the chair of Network Rail has said.

Delivering the Chartered Institute of Logistics and Transport (CILT) annual Rail Lecture in London this week, Sir Peter Hendy said he had a “very optimistic view” of the future of Britain’s railways, but added: “The amount of senior people in the industry who can talk about why the railway is good and why you should invest in it is slim.”

After new figures yesterday showed that passenger numbers and revenue on the rail network are still growing, but at a slower rate than last year, Paul Plummer, chief executive of the Rail Delivery Group, said Britain needed a “bigger, better, modern railway” to meet demand.

Sir Peter admitted that Network Rail is facing financial problems, saying that the fixed Treasury cap introduced when Network Rail returned to public ownership meant that “money is now tight”.

“Some of the projects have been reserved, we are now selling assets to the tune of £2bn and the doors have shut on never-ending debt,” he added.

Network Rail is considering selling off its stations to help plug its debts, although it recently confirmed that it has rejected plans to sell its telecoms network.

Sir Peter said Network Rail should follow the example of Transport for London, where he used to be commissioner, and where some projects were funded by “third parties who wanted it to happen”.

“We don’t do projects for the sake of the railway; they must be ranked by their contribution to the economy,” he said. “It’s not unreasonable to ask for people who will benefit from these projects to contribute, it should not just be the local authorities, it should be the people who stand to gain from the railway development; property developers, people who create jobs and the supply industry.”

Earlier this year, Sir Peter told the London Assembly Transport Committee that businesses in London could fund as much as 50% of Crossrail 2.

Network Rail also announced that it is establishing a lead for business development for each route, who will be responsible for seeking private investment.

In particular, Sir Peter said he thought the introduction of digital railway was “inevitable” to resolve congestion on the network.

Speaking to the Transport Select Committee in the summer, David Waboso, the managing director of digital railway, said that it should be introduced in stages to avoid an “over-heroic” approach.

Sir Peter added that the rail industry needs to do more to recruit the workforce it needs to deliver improvements.

“With a digital railway, we also need to develop new skills and we need to encourage a more diverse workforce,” he said. “The industry has historically been seen as not attractive because we do not explain what it is doing and where we are going.

“The rail industry is slower than others in attracting a diverse workforce because we fail to communicate that we are an industry of growth. We fail to get the positive media coverage; we are not a load of old dull blokes in the corner – we are a central part of the way this nation lives and functions.”

Sir Peter said the rail industry should stress the message that “if you want to work in the railway industry, you have a job for life”.

Speaking at iRail 2016, John Evans, CEO of the soon-to-open National College for High Speed Rail, said that the rail industry should “present the human side of engineering to Millennials and Generation Z”.

(Image c. Stefan Rousseau from PA Wire)

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