Make businesses pay for new railways

Councils, local businesses and train operators should be made to co-invest in major railway upgrades, according to the chief of Network Rail.

In what would amount to the biggest shake-up of railway financing since privatisation, Network Rail, which delivers the country’s track and stations infrastructure, is calling for the economic beneficiaries of investment to put their hands in their pocket alongside other investors, reports The Times.

Mark Carne, the chief executive, is under pressure to turn around the state-controlled company after the Great Western fiasco in which billions of pounds worth of intercity electric trains will lie dormant because Network Rail has failed to electrify the line on time or anywhere near budget. While Mr Carne is scathing of the mistakes and projections made by Network Rail before his arrival nearly two years ago, he said that a reform of investment in the railways in time for the next big project — the 2017-2022 transformation of the Leeds-Manchester trans-Pennine line — should be accompanied by a redrawing of funding options.

Speaking before today’s launch of the first new railway in a century between a major city and London — Oxford to London Marylebone via Bicester — Mr Carne said: “Where train operators or others benefit from the delivery of increased passenger numbers, then they should be prepared to put their hand in their pocket and help with the investment.”

The new service being operated by Chiltern Railways has involved the building of 12 miles of new track and three stations at a cost of £320 million — £130 million of which was put up by Chiltern, owned by Deutsche Bahn of Germany. Chiltern expects to get its financial return from hundreds of thousands of Oxford-London commuters and visitors to the Bicester Village retail park.

Mr Carne believes that in future other economic beneficiaries such as local authorities and businesses should also be involved in funding such projects.

The new Oxford-Bicester line is part of an ambitious new east-west rail project linking Oxford to Milton Keynes and Bedford and on to Cambridge and Ipswich and Norwich, dubbed The Varsity Line.

Early work on that project is being financed, to the tune of tens of millions of pounds, by local councils along the proposed route. “It is the sort of reform that I want to bring into the railways,” Mr Carne said. “It is completely wrong for the entire country to fund individual railway investment when that is creating specific local opportunity.”

New funding models should be used in the multibillion-pound financing of the upgraded trans-Pennine line, which Network Rail has paused for two years of detailed planning, he added.

After a mauling last week at the hands of MPs on the public accounts committee over the delays on Great Western, Mr Carne said that the company must not make the same planning mistakes that have led to costs ballooning on the London-Bristol line by 75 per cent to £2.8 billion.

“The problems stem from going into a major and complex project too quickly and too soon,” he said.