14.09.15
Passenger revenue close to covering operating costs of running the rail network
The railway network raised enough revenue to cover almost all of its daily operating costs in 2013-14, during which it carried more passengers than at any time since demobilisation after the First World War.
At the same time, train operating company margins have dropped by from 3.6% to 2.3%. The cost of operating and maintaining the network as a whole has also fallen by 32% in the last decade.
These figures were revealed in a report by the Rail Delivery Group (RDG), which represents Network Rail and TOCs, based on data collated by KPMG mainly from already-published sources.
Growth in passenger numbers has also increased annual fares revenue from £4.3bn to £8.2bn since 1997, which the RDG owes mostly to actual journey growth – compared to 7% hailing from increased fares.
Edward Welsh, director of communications for the RDG, owed rail’s success to the partnership between the private and public sectors “working together to deliver batter value for passengers, freight customers and the nation”.
But he added: “There is much more we need to do to improve services for our customers. Our greatest challenge is to plan and build for the ever-growing demand for rail by increasing capacity cost-effectively and generating revenue to support investment in more and better services.”
In August, RTM revealed that payments from TOCs to the government skyrocketed from £40m to more than £800m in the last year.
All but two train operators had either received less subsidy or paid higher premiums to the government during 2014-15 than the year before.
This represented the fifth year running in which the government has received more in premium than it has paid out in subsidy.
Private investment in the rail industry also increased remarkable in 2014-15, increasing by 53% to a whopping £647m. Investment in rolling stock followed the same trend by rising to £715m – more than double the private investment than in the previous year.