Network Rail upgrade programme gets amber light

The government says it is set to accept the conclusions of Sir Peter Hendy’s report on Network Rail’s ambitious investment programme, which recommends that the majority of programmes and projects will go ahead for delivery by 2019, subject to a final consultation over the next two months.

The Department for Transport is seeking views on Sir Peter Hendy’s report which reviewed Network Rail’s investment programme to 2019 and looked to put the rail upgrade programme on a more realistic and sustainable footing.

Network Rail is two years into its five year £38 billion CP5 investment programme. Hendy's appointment as chairman of Network Rail and his subsequent report on the replanning of the investment programme came after it was revealed that a number of major projects in the £11.8 billion enhancements programme of CP5 were significantly exceeding earlier cost estimates. Hendy found costs on major main line electrification projects had escalated by 21%. He announced the additional £2.5 billion of capital funds would be found by selling £1.8 billion of assets and raising an extra £700 million of borrowing.

Hendy's report lays the blame for the cost over runs on inadequate planning processes both within and outside Network Rail and changes in scope during development and delivery, along with the realization that some large projects should have been managed on a holistic basis rather than piecemeal. Network Rail’s return to the government books as a fully public sector body and a consequent limit on its borrowing options also contributed to the problems.

His replanning report allows the same scope of work to be carried out but £2 billion of work on the Trans Pennine upgrade and Midland Main Line electrification will now extend into the next Control Period between 2019 and 2024.

Transport Secretary Patrick McLoughlin said he wants to consult on the report to ensure that the most efficient and effective plan is executed and that maximum value is derived from the plan for passengers, freight users and taxpayers before finally giving the programme the green light.

Following the conclusion of the consultation process on 18 March 2016, the DfT will analyse the responses and publish a report before the Transport Secretary reaches a decision on whether to accept Sir Peter Hendy’s plans for re-profiling the rail enhancements portfolio.

Download the Hendy Report Consultation here.



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