HS2

Major stations could be sold off to plug Network Rail debt

Privatisation options are already starting to take shape across Network Rail as a source told national press that the infrastructure owner has hired Citigroup bankers to look at the possibility of selling off 18 major stations nationwide.

Receipts from this sell-off to developers, which could cover either the whole station or just parts of it, would go towards plugging Network Rail’s crippling debt, estimated to hit £50bn by the end of the decade.

It is also broadly in line with options outlined in the interim Shaw report, which suggested its routes or assets could be financed through private cash. But the final report, expected next month, could recommend anything from continued public status to full denationalisation.

According to the Independent, bankers are now looking at options for stations including London Waterloo, Reading, Leeds, Manchester Piccadilly, Edinburgh Waverley and even the brand new Birmingham New Street.

Some other major stations can’t be considered as they are currently booked for redevelopment over the next five years.

Possibilities being looked at include full sell-off, asking big firms to run the shops in the stations, or offering individual concessions – similar to the model used at St Pancras, which is run by HS1.

A Network Rail source told the paper that Citi was asked to “pull together options to realise best value from our stations”.

“It could be just the retail; it could be a concession option like St Pancras. It could be some, could be all. It might be same answer for all or treating them individually,” the source added.

“The point is there are lots of possibilities. Citi is testing the market so there will be lots of opinions out there and none of them right, as our board will make that decision some months down the line from now.”

But while Network Rail claims that Citi is just testing the market, the paper’s other sources argued that hiring a major US bank to carry out works makes these sales “inevitable”, since the company specialises in “outright divestments” rather than just reviews.

Yet it still remains a possibility that train operators could be taken in to manage stations in lieu of outside firms, although sources believe bankers would still be able to attract firms such as shopping centre owners and large developers.

A Network Rail spokesman told the paper: “Generating funds to invest in building a bigger, better railway is at the core of our disposals strategy. We’re taking a long hard look at our assets, ensuring we keep what we need to grow and expand the railway, but then looking at ways we can realise best value from the rest to reinvest.”

Today’s claims are not without precedent, with several rail bosses previously hinting at the positive benefits of privatisation and of selling off some of Network Rail’s routes. 

It also comes sandwiched between Sir Peter Hendy’s review of CP5, which identified failings in Network Rail’s “undeliverable” project portfolio, and Nicola Shaw’s upcoming report, which has already spurred headline fears of full privatisation as part of the infrastructure body’s biggest shake-up in over a decade.