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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.


Nick Radcliffe   15/09/2015 at 12:34

Please please please send this information to Jeremy Corbyn and the entire Shadow Cabinet before they try to undo 3 decades of hard work through ill-informed dogma

Joel   30/09/2015 at 15:05

Please explain the last paragraph of the article - where is this 'private investment' in the rail industry originating from? Rolling stock is commissioned centrally (government) and allocated centrally (government) and the TOCs do as they're told with it (and pay rent to the ROSCOs). If you're talking stations and infrastructure, that's Network rail, a government body. What is genuinely private and discretionary investment, where money has come unbidden by the State and was not a mandatory term of franchise?

RTM   30/09/2015 at 15:25

Hi Joel, the stat comes from the ORR: A net total of £647 million was invested by private companies during 2014-15. This is an increase of 53% on the previous year (51% in real terms).  Since 2006-07, rolling stock investment has accounted for the highest proportion of net private investment peaking at 92% in 2009-10. In 2014-15, the net investment in rolling stock was £715 million. This is more than double compared to 2013-14. This was due to new locomotives leased to TOCs.  In 2014-15, less than £1 million of net private investment was made in track and signalling. Primarily, investment in track & signalling is made by Network Rail and their data is not included here so this element of private investment is expected to be small.  There was a net sale of £128 million of station assets in 2014-15. This is the first time since the time series began in 2006-07 that the disposal of station assets has exceeded station investment. Spending on stations peaked in 2006-07 at £155 million.

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