Latest Rail News

22.02.16

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.

Comments

Lutz   22/02/2016 at 21:29

Pretty much inevitable now when you take into account the wider picture of the Government's current and future finances even before you look at the Network Rail books.

Simon   23/02/2016 at 14:56

Presume NR will just lease the station back from the eventual owners of these sales as per what they have done with their HQ in Milton Keynes and Westwood in Tile Hill...

Jim   23/02/2016 at 15:04

Spend all that money on the stations and then sell them off? I hope some un-common sense prevails!

Denis   27/02/2016 at 09:57

These Stations are a major source of revenue for NR. NR's non-profit status causes internal confusion. These sites should be run as individual government owned companies with profits ploughed back into NR.

The North!   11/03/2016 at 12:20

Why is it that very clever people, who are paid a lot of money can come up with extremely silly & short term views! If this was a house that I owned, but I needed money to extend it - would I sell the house, lease it back & then use the money to extend the house (that someone else now owns)?!?! NO Come on guys - use some common sense. If funding is needed so desperately, raise a mortgage on the stations & repay it over 25 years. At least the nation will still own these crucial hubs.

Add your comment

 

related

rail technology magazine tv

more videos >

latest rail news

Dawlish railway may be ‘moved out to sea’ to protect it from storms under new proposals

13/06/2019Dawlish railway may be ‘moved out to sea’ to protect it from storms under new proposals

The storm-battered Dawlish rail line could be “moved out to sea” and away from the “hazard” of the cliffs under new plans... more >
TfL awards contract for new DLR fleet to replace 30-year-old trains

12/06/2019TfL awards contract for new DLR fleet to replace 30-year-old trains

TfL has awarded a contract for 43 new trains to replace the oldest rolling stock on the Docklands Light Railway (DLR), with the first scheduled t... more >
Hitachi trains for Happy trains

10/06/2019Hitachi trains for Happy trains

ScotRail project manager Kirsty Devlin discusses the withdrawal of Class 365s, to be replaced with the brand-new Class 385 fleet. While Scot... 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 >

rail industry focus

View all News

interviews

Advancing the rail industry with management degree apprenticeships

08/05/2019Advancing the rail industry with management degree apprenticeships

In answering the pressing questions of how current and future generations of managers can provide solutions to high-profile infrastructure projec... more >
Women in rail - is the industry on the right track?

12/03/2019Women in rail - is the industry on the right track?

RTM sits down with Samantha Smith, sole female member of the TransPennine Route Upgrade Alliance Leadership Team, to find out more about encourag... more >
TfN Strategic Transport Plan: not just for transport's sake

22/01/2019TfN Strategic Transport Plan: not just for transport's sake

Peter Molyneux, Transport for the North’s (TfN’s) strategic roads director, has been leading on the development of the seven economic... 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. ... more > more last word articles >

'the sleepers' daily blog

Apprentice to Co-leading the Rail Sector Deal

05/06/2019Apprentice to Co-leading the Rail Sector Deal

In a series of Q&A’s with key speakers on the run up to TransCityRail Midlands, we caught up with TransCityRail panellist and Amey&rsqu... more >
read more blog posts from 'the sleeper' >

comment

Hitachi trains for Happy trains

10/06/2019Hitachi trains for Happy trains

ScotRail project manager Kirsty Devlin discusses the withdrawal of Class 365s, to be replaced with the brand-new Class 385 fleet. While Scot... more >
Malcolm Holmes on new stations for the Black Country

10/06/2019Malcolm Holmes on new stations for the Black Country

Malcolm Holmes, executive director of the West Midlands Rail Executive, described the new stations set to be built for the Black Country region o... more >
The skills bottleneck: Dealing with growing apprenticeship demand

10/06/2019The skills bottleneck: Dealing with growing apprenticeship demand

Richard Turner, head of apprenticeships at Network Rail, details the reasons for growing apprenticeship demand in the rail sector over the coming... more >
A train journey on the Midland Main Line 15 years from now…

10/06/2019A train journey on the Midland Main Line 15 years from now…

Chris Hobson, director of policy and external affairs at the East Midlands Chamber, talks in detail about what travelling through the region will... more >