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Network Rail appoints KPMG to advise on mooted power asset sales

Network Rail has appointed KPMG to advise on the potential privatisation of its electrical power assets.

The rail operator will “assess interest” in its electrical power assets from global investors and electricity network operators.

Network Rail already plans to raise billions through sale of property assets and is investigating the sell-off of stations including Waterloo.

The organisation’s debt is forecast at current rates to top £50bn by 2020 and is now on the Treasury’s balance sheet.

Network Rail said it wanted to “maximise commercial opportunities and inject private capital into the railway to help fund investment”.

Chief executive Mark Carne said: “Our approach is all about financial discipline, with a renewed focus on our core activities while being open and innovative about new sources of finance to fund our growing railway.

“Network Rail’s job is to help support Britain’s economic growth by providing the railway that Britain needs, today and in the future. While no decisions have yet been made, if there are investors or others with expertise in key areas who can help us do that, then we should look to embrace those opportunities.”

Financial reform is one of three broad changes set out in Network Rail’s response to the Shaw Report scoping document which will help the rail industry rise to the challenges ahead, alongside further devolution to route businesses and accelerated technological transformation to deliver the capacity needed to cater for future demand.

A report by HS1 chief executive Nicola Shaw on the future of Network Rail is due to be published around the time of the Budget on 16 March.

The report was launched last July following the pausing of work on major parts of Network Rail’s CP5 investment programme due to “rising costs and missed targets”.

Recent reports have suggested that the former HS1 boss will recommend the partial break-up and full privatisation of the government-owned Network Rail.

The head of the team looking into the future structure of Network Rail has rubbished claims that the privatisation of the government-owned body is a foregone conclusion.

See Construction News on Monday for a special report on the future of Network Rail

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