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Network Rail reform opens up infrastructure to private finance

Network Rail has announced plans to open up a swathe of infrastructure projects to private investment as part of plans to increase competition and innovation.

The client, which accounts for approximately a fifth of the UK’s annual infrastructure spending, announced the changes following a review into the operator by Peter Hansford.

According to Network Rail chief executive Mark Carne, the changes present a “raft of opportunities” for other companies to work directly on UK railway projects.

Mr Carne said: “A growing railway drives the economy, jobs and housing and by welcoming open competition into the core of our business we will increase the pace of innovation, creativity and efficiency and could deliver even more improvements to our railway and for the people that use and rely on it every day.

“I am determined to create an environment where innovative third-party companies can compete for and directly deliver railway projects.

“These reforms mark the next stage of Network Rail’s transformation having already decentralised into nine devolved individual businesses.”

These reforms also aim to unlock new sources of funding, with potential investors able to choose who delivers projects for them.

This is intended to reduce the burden on central government and taxpayers.

“I am also determined to find ways for the private sector to directly invest in railway projects,” Mr Carne said.

“As a government-owned business, this has some challenges, but by unlocking private finance we can potentially deliver railway improvements that would otherwise not be possible.”

According to Network Rail, the new initiative will work in a similar way to the operator’s two-year deal with signalling and train control firm Resonate, which see the supplier finance and bear the risk of introducing the new technology, in return for benefiting from the savings made in reducing delays.

Earlier this month transport secretary Chris Grayling deferred a decision on future rail funding to seek “more assurances on cost” while calling on Network Rail to improve its “efficiency”.

Network Rail reforms at a glance

  • Publishing a regular pipeline of third-party project opportunities.
  • Creating a swathe of third-party project champions across the country who will work side-by-side with delivery bodies, investors and funders to ensure their projects are successful.
  • Creating a clear service-level agreement for third parties so they have clarity and reassurance regarding Network Rail’s legal obligations.
  • Introducing flexibility to railway standards where this can encourage innovation and reduce costs without compromising safety.
  • Launching a rewards scheme where money saved from introducing a new idea or innovation is shared between Network Rail and the company or individual.


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