Despite global economic uncertainty, investments in Britain’s national railway infrastructure are poised to rise over the next three years, promising busy times ahead for suppliers across the entire sector.
Spending levels on the system are determined by five-year Control Periods (CPs) agreed between Network Rail and the Office of Rail Regulation. Network Rail still aims to fulfil its commitments under the current agreement, CP4, which began in FY2009-10 and runs until FY 2013-14. In an update to its Delivery Plan, published earlier this year, the company confirmed total spending including operating costs of £36,726 million over the five years of the plan, with £23,072 million of this allocated from the current year until the end of the period.
And while investments in network enhancements ran at an average of £1,768 million over the first two years of CP4, spending on such projects is set to increase significantly in its final three years to £8,257 million – on average more than £2,750 million annually, a rise of 64 per cent.
In updating its Delivery Plan, Network Rail has reviewed the phasing of its investment expenditure. “We are now planning a smoother profile of activity volumes,” says the company, in a move that by levelling out demand will come as good news for the supply industry.
Spending on asset renewals in the last three years of CP4 will also increase, with an annual average of £2,534 million budgeted – up 9 per cent on the preceding two years.
Network Rail’s CP4 Delivery Plan Update can be accessed here.
Looking ahead to CP5
Looking further ahead, work is now well under way to set spending levels for CP5, which begins in FY2014-15. Among key submissions to the government’s High Level Output Specification (HLOS), which will be published in summer 2012 and will establish the key parameters within which CP5 must work, are the Initial Industry Plans (IIPs) for England & Wales and Scotland.
Developed by the Association of Train Operating Companies, Network Rail, the Rail Freight Operators’ Association and the Railway Industry Association, the IIPs set out the industry’s proposals and options for a value-for-money, sustainable railway. They provide valuable early insights into how the railway might develop after 2014.
The IIPs for England & Wales and for Scotland can be accessed here.