Network Rail will promise on Monday to open itself up to competition and list the opportunities for outside companies to directly build and invest in Britain’s rail infrastructure.
For the past 15 years, Network Rail, which is government-owned, has been in sole control of 2,500 stations, 20,000 miles of track and 40,000 bridges and tunnels.
Unlike its predecessor, Railtrack, a private, listed company that collapsed after a series of major train accidents, Network Rail has an enviable safety record, the last death in a railway crash occurred in 2007 in Cumbria.
But its critics point to the missed targets on its five-year investment programme, budget overspends and punctuality failures.
In response, Mark Carne, chief executive at Network Rail, will announce “fundamental changes” that will pave the way for outside companies to compete for infrastructure contracts.
Network Rail will publish its pipeline of project opportunities, ranging from building new stations, car parks and depots, to a new rewards scheme where a company that offers Network Rail a successful innovation can share in the resulting cost savings.
“These reforms are all about becoming more efficient as a company, and as an industry, better serving the needs of customers and stakeholders who depend on the railway and reducing the burden of the railway on central government,” Mr Carne said.
The potential for growth in outside investment is huge. In the current five-year funding programme for Network Rail, just £328m out of an overall £15bn spend on big enhancement projects came from third parties.
“It’s going to unlock a lot of additional funding for the railway that otherwise wouldn’t happen,” said Mr Carne. “The more you bring in competition . . . the more you can be confident that you’re working in the most efficient way.”
The changes would offer property developers the chance to fund station improvements, for example, if they believe it would boost the value of homes in the area. Another area of co-operation could see local authorities paying for more car parking and then receiving the proceeds.
Private companies may be able to carry out electrification work more cheaply than Network Rail, or companies with signalling technology may offer it to Network Rail in exchange for financial rewards from cutting delays.
The change comes after a review, led by Professor Peter Hansford, found there were huge barriers to attracting more private sector involvement to fund and finance Britain’s railway projects.
It recommended that Network Rail needed to be clearer about the opportunities on offer as well as creating clear service level agreements for third parties. Network Rail plans to publish annual performance statistics to show how well it is meeting these new service level agreements.
Network Rail plans to trial the reforms in the autumn on its Anglia route, one of its eight devolved lines, with the aim of rolling them out across the country in the spring.
By the end of the year, each of its eight route businesses will publish a pipeline of projects that they want to put out for tender, as well as a list of centrally funded projects.
Mr Carne said the majority of the third-party opportunities will be for smaller projects, but could also involve bigger schemes in the future.
Some of the projects in the frame include Leeds/Bradford Airport station, which would be funded by central government but potentially delivered by a third party. Funding opportunities could include Wixams station in Bedfordshire, a new station at Robroyston in Glasgow as well as a multi storey car park at Northampton.
The reforms come just weeks after the Department for Transport came under attack for abandoning several rail electrification upgrade projects and delaying a decision on future railway funding. This has raised concern within the industry about the amount of funding available for major works, as well as day-to-day maintenance of the railways.
Mr Carne said he is confident there will be funding for large projects in the next round from 2019 to 2024.
“We all recognise that the old ways of doing the enhancements funding, where you decide what you want in five-year blocks and allocate a massive slug of money to Network Rail to deliver a whole series of projects over five years is the wrong way to do it,” said Mr Carne. “As projects mature they will have to earn their place in the government’s priorities, but if they’re good enough . . . I’m sure they’ll be funded.”