Latest Rail News

09.11.12

£775m efficiencies achieved by Network Rail

Network Rail is on track to deliver the efficiency savings required by the ORR, the latest annual performance assessment shows.

The report found Network Rail achieved efficiencies of £775m over the past three years, and is on target to deliver required savings by 2014. However, the ORR still has concerns about punctuality and reliability.

Network Rail must cut £1bn annually for the current control period, 2009-14, and efficiencies have so far been found in rationalising signalling and control centres, reorganising its rail maintenance function, reduced staff costs and reduced use of sub-contractors.

The ORR’s assessment of financial performance found £172m less than that reported by Network Rail, due to failure to deliver required levels of punctuality and reliability. The regulator also has concerns about the sustainability of Network Rail’s management of rail infrastructure.

ORR’s chief executive, Richard Price, said: “We welcome the progress that Network Rail is making in improving its efficiency and that the company is currently on track to meet the stretching target we set for reducing its costs.

“However, we remain concerned about the company’s performance in line with regulatory targets, with serious problems still affecting punctuality on key services. Our assessment has been adjusted to reflect these shortfalls. We expect Network Rail to deliver improved performance and meet its targets by 2014, and will keep up the pressure on the company to do so.

“The drive for efficiencies needs to be skillfully planned and delivered by the company so that its stewardship of the infrastructure and the performance of the network do not suffer.”

Paul Plummer, group strategy director at Network Rail, welcomed the news and said: “Millions of pounds have been saved helping to reduce the railway’s cost for taxpayers and fare-payers alike. This progress is being delivered while also maintaining high levels of safety, performance and investment and we’re determined to keep this momentum.

“The railway’s popularity is a good thing that is to be welcomed but we, and our train operating company colleagues, cannot afford any complacency as there are yet more challenging targets ahead.”

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