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CP5 funding settlement agreed

Network Rail has agreed to the ORR’s funding settlement for CP5.

The company will be given £38bn for the period between April 2014-19 to maintain, renew and improve the network. Published at the end of October by the ORR, the settlement offered a compromise of £1.7bn of cuts in the costs of running the railway.

Network Rail agreed it would “need to do some things very differently” to meet the regulator’s targets and deliver the necessary savings.

The settlement will see new trains introduced to the network, new stations built, improved facilities, platforms lengthened, and a number of “transformational” projects completed.

Network Rail has agreed to run nine out of ten trains on time for regional, London and South East and Scottish routes. The ORR will also introduce stronger targets for asset management and Network Rail will be monitored for progress on making the network more resilient to bad weather and climate change.

Network Rail will now publish its delivery plan for CP5 in March.

ORR chief executive Richard Price said: “Network Rail has committed to the challenge of delivering exciting plans for Britain’s railways between 2014 and 2019. This new phase will see Network Rail enhance safety, increase capacity, and improve the performance and resilience of the rail network. Service standards will get better, as stations up and down the country are modernised and lines are electrified. Alongside this work, the company will also deliver more, pound-for-pound, than ever before, as it utilises new technology and better ways of working.

“We welcome Network Rail’s recognition that it will need to do things differently to fully deliver. This is a fresh start for the company and an opportunity – supported by significant levels of funding by governments and passengers, and working with the rest of the industry – to learn lessons and build on successes from the past. Meeting these challenges will be tough, particularly in the early years for punctuality in England and Wales because of recent performance levels. We will focus on ensuring the company, working with governments and the rest of the sector, delivers its plans to achieve long-term and sustainable improvements for customers and taxpayers.”

David Higgins, Network Rail chief executive, said: “The railway is a complex, long-term, critical element of Britain’s infrastructure and needs sustained, high levels of investment if we are to meet the public’s rapidly increasing appetite for rail travel, and businesses’ desire to move freight off congested roads.

“We were clear in the development of our plans that we would need to do some things very differently in CP5 if we are to be successful in meeting the new challenges that we face and we remain committed to continuing with these changes

“Together with the ORR, we are determined to continue our drive to improve safety. Fundamental to this will be on-going improvements to our safety culture and how we manage our assets. By achieving this we can also deliver on-going efficiency savings and improve the reliability of train services, but getting the balance right between running more trains and improving punctuality will be a major challenge.

“We are disappointed that we will start CP5 at a lower level of performance than was assumed at the time of the Final Determination. This is partly because of the weather but we also recognise our responsibility for the missed targets. We can still meet the targets for the end of the control period. Although we cannot do so as quickly as assumed or in all weather, we will work with operators to improve performance as fast as possible.”

Michael Roberts, director general of the Rail Delivery Group, said: “The multi-billion pound funding settlement for the railway for the next five years is vital to improving services and carrying more passengers and goods. Meeting the challenging targets on performance and efficiency will call for all parts of the industry to work more effectively together. The Rail Delivery Group is committed to play its part in making this happen.”

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