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Office of Rail and Road rejects Network Rail civils plan

The rail regulator has rejected Network Rail’s work assessment plan for civils packages on its £38.5bn Control Period 5 enhancement programme, delaying a funding decision on the work.

Network Rail submits assessment plans to the Office of Rail and Road to allow the regulator to make suggestions on the level of funding for individual projects.

However, the ORR has yet to approve CP5 projects planned between 2016 and 2019, meaning the funding levels for projects have not been fully agreed.

ORR director of railway performance Alan Price wrote to Network Rail group strategy director Paul Plummer, saying that the civils assessment plan put forward by Network Rail in March was “not compliant with the requirements of the notice” and could therefore not be accepted.

The letter was sent in May following Network Rail’s civils assessment submission in March, but has only recently emerged after the Commons public accounts committee launched an inquiry into Network Rail’s 2014-19 rail investment programme last week.

The civils assessment plan was set up to provide more scrutiny of Network Rail’s budgeting and scheduling of work.

It allows the ORR to review Network Rail’s expenditure on projects and make suggestions on funding levels in accordance with costs, outputs and deliverability.

The submission in March to the ORR was expected to “demonstrate that it had in place a bottom-up workbank for years 3, 4 and 5 of CP5” and “justify planned civils expenditure”.

This would include planned expenditure on civils projects such as underbridges, earthworks and major structures and should “supply sufficient evidence to show why individual schemes are included”.

However, the ORR found the evidence Network Rail had supplied “was not sufficient” and did not enable the ORR to “form a judgement” on work for the remainder of CP5.

Mr Price wrote: “While you [Network Rail] are confident that Network Rail ‘can demonstrate what work we need to do, where it needs to be done, and what it will achieve’, you acknowledge that ‘there is still a wide range of uncertainty around how much our plans will cost’.

“Given this acknowledged degree of cost uncertainty, together with your recognition that further work and an updated submission is needed, I cannot consider that your submission is compliant with the requirements of the notice.

“It does not enable ORR to form a judgement on both the volumes and efficient costs of the work for the remainder of CP5.”

The ORR initially planned to submit a draft of its response in June, with the final version, including decisions on project funding, intially scheduled for 30 September.

The ORR said it was now working with Network Rail and would wait until this work had finished before any decisions were made on the funding of CP5 civils work.

A Network Rail spokesman pointed out that the operator was overhauling its business plan ahead of the publication of chairman Sir Peter Hendy’s review of the enhancement programme.

He said: “The terms of reference for the Hendy review include a review of our core business, as enhancements can’t be considered in isolation.

“Following conclusion of the Hendy review later this year, we expect to update our delivery plan in the first quarter of 2016.”

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