ORR’s funding cuts ‘unbalanced and unrealistic’

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Network Rail has described the ORR’s plans to cut funding for Britain’s railways by £2 billion over the next five years as “unbalanced” and “unrealistic”.

In January, Network Rail published its strategic business plan which set out a budget of £21.4 billion to cover the cost of major projects and maintenance work throughout CP5.

Announcing its draft determination, the ORR identified £2 billion worth of savings that it believes need to be made if Network Rail is going to “reduce its dependence on public subsidy”.

Responding to the draft determination, Network Rail chief executive David Higgins described the ORR’s directive to improve performance levels with less funding as “unbalanced and, therefore, unrealistic”.

As a result Network Rail is asking the ORR to reinstate £1.4 billion of the proposed cuts.

Network Rail said it was particularly concerned about plans to reduce funding for track renewals and a new IT system.

It also felt that a target to deliver an additional £800 million of property income and enhancements on top of £1.8 billion already identified was ‘unrealistic’.

David Higgins, Network Rail chief executive, said: “The regulator’s determination provides the opportunity for Network Rail and the industry to build on the progress and success of the last decade, but whilst there are many aspects of the draft which we welcome, taken as a whole we believe it is unbalanced and, therefore, unrealistic.

“We had already set ourselves tough, challenging targets for the next five years in terms of further improving performance, safety and continuing high levels of investment to grow and expand our railway.

“The ORR’s response to our plans calls us to deliver too much, too quickly and is, overall, simply unrealistic. It would be irresponsible for us not to be open and honest about the scale of the challenge that would pose for us as an organisation.”

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