Regulator publishes Network Rail’s efficiency and financial assessment report
Posted: 1 October 2014 | | No comments yet
The Office of Rail Regulation published its assessment of Network Rail’s efficiency and financial performance from 2009-2014 (control period 4, CP4)…
The Office of Rail Regulation (ORR) today published its assessment of Network Rail’s efficiency and financial performance from 2009-2014 (control period 4, CP4).
The report (PDF) highlights that:
- Network Rail has implemented a number of initiatives to reduce its costs of operating, maintaining and renewing the national rail infrastructure by 15.5% in CP4.
- This work represents a positive outcome for the company’s funders, however, the 15.5% efficiency savings reported were 8.0 percentage points lower than the 23.5% efficiency savings that Network Rail agreed to deliver. The lower efficiency was mainly due to additional costs incurred as Network Rail undertook more work towards the end of the control period to improve train punctuality and reliability.
- In CP4, Network Rail spent £1.2bn more on operating, maintaining and renewing the network, Schedule 4 & 8 costs and financing costs than assumed in our determination of Network Rail’s funding for CP4. It also spent an additional £1.4bn on enhancements to the network than assumed in its funding settlement. This higher enhancements expenditure was mostly due to additional projects that were not included in the CP4 funding settlement but that were later requested by governments.
- The efficiency shortfall means that Network Rail now faces a greater challenge to deliver the further 19.4% efficiency savings on operations, maintenance and renewals that the company has been funded to deliver by 2019.
- Network Rail’s financial performance in Scotland was better than Great Britain as a whole and it delivered the majority of its required outputs for Scotland.
To read the report in full visit: http://orr.gov.uk/what-and-how-we-regulate/regulation-of-network-rail/monitoring-performance/efficiency-and-finance-assessment