13.04.16
Rail must be funded by private sector, not concessions – Hendy
The “obvious way” of paying for railway upgrades in the near term is getting the digital railway done by the people who install it, paid for by private finance rather than run as concessions, Sir Peter Hendy, the chairman of Network Rail, has said.
Delivering his keynote speech at the second day of Infrarail, Sir Peter ran through the many improvements needed in the rail network in terms of capacity and technology, such as through the digital railway - an aspect he said Network Rail's chief executive Mark Carne is “evangelical” about.
But going forward, Sir Peter said the Treasury will never provide enough money to fund all upgrades and advances needed.
“One of the pieces in Nicola’s [Shaw] report about Network Rail and its future, which Mark and I entirely agree with, is the necessity of getting third party private funding into the railway,” he said.
“Nicola’s essay about concessions shows really that that's quite a difficult route. We certainly believe in the near term that one of the easiest ways is to actually get the digital railway done by the people who install it, the people who supply, paid for by private finance and funded from the increasing capacity that can arise if you apply that technology successfully, which won't be there if you don't. I think that's an obvious way.
“The other obvious way of doing it is to actually get the third party beneficiaries of more railway capacity - that's people whose jobs are created, and who build houses, and who are the recipients of the chancellor's taxation strategy of allowing more local people to have business rate growth and capital grants - and they too are going to have to pay for some of this railway capacity in CP6 because the Treasury isn't going to pay for all of it.”
Shaw also confirmed in her major review of Network Rail restructuring and devolving the infrastructure body is the right thing to do, a position Sir Peter and Carne agree with.
“Part of that is the alignment of performance targets with the TOCs so that actually, people in our organisation believe that they are the customers, and not the regulator,” the chairman added.
“Even better news is that the regulator, or at least the new chair and chief executive of the ORR, also believe that too. So I think we're going in the right direction.”
Read the full coverage of Sir Peter's speech, including more about the digital railway and the necessary ‘metronisation’ of the network, in RTM’s upcoming April/May edition.
(Image c. Stefan Rousseau from PA Images)