Network Rail outlines record £7bn investment in latest annual report

Network Rail’s latest annual report and accounts show a pre-tax loss of £173m compared to £48m profit last year – though the national rail body say the loss was planned and expected as a result of the design of the fixed regulatory settlement for 2014-2019, increased train performance penalty payments, increased maintenance spending and increased depreciation and financing costs

However, the report for the 12 months to 31 March 2019, saw record levels of investment up 6.2% from last year to £7bn, with revenue increased to £6.7bn from £6.6bn. It was also a year that Network Rail say almost 3,000 new services a week were added to the network, providing “much needed capacity and extra seats as investment in Britain’s infrastructure hit a record high.”

The report says that millions of passengers and freight users will benefit from the £7bn targeted investment, aimed at growing and expanding the railway infrastructure in preparation for over 6,000 new weekly services that will be introduced gradually over the next few years.

Examples of investment include:

• The rebuilding of London Bridge station, transforming the station for hundreds of thousands of passengers;
• Other new stations opened at Meridian Water, Maghull North and Newton-le-Willows;
• Huge increase in services, carriages and seats along the Thameslink route with the completion of the multi-£bn project;
• New electrified routes and services between Glasgow and Edinburgh, Walsall and Rugeley, Stirling and Alloa and on the Grangemouth branch;
• Longer and new platforms and services serving London Waterloo, including the reopening of London Waterloo International for domestic use;
• Liverpool Lime Street and Derby stations remodelling;

Andrew Haines, chief executive, said: “Passengers and freight users are now starting to see and feel the benefit of years of investment in the nation’s railway infrastructure as thousands of new services and new trains join the network. Lessons have been learned from last year’s painful experience of bringing new services on-stream. The industry worked closely together on the smooth introduction of the December 2018 and May 2019 timetables, introducing thousands of new weekly services, and we will continue to work with our train operator colleagues to further improve connectivity for passengers.

“At the heart of the changes underway at Network Rail is a new focus on delivering better punctuality and reliability – passengers’ number one priority. We are putting passengers and freight users at the heart of our work and decision making enabling us to respond more quickly to the things that matter most to the people that rely on us every day.”

Financial highlights for the year include:

• Record levels of investment up 6.2% from last year to £7bn (almost five times greater than 1998/9);
• Revenue increased to £6.7bn from £6.6bn;
• A loss (before tax) of £173m (£48m profit last year) was expected and planned for and was a result of the design of the fixed regulatory settlement for 2014-2019, increased train performance penalty payments, increased maintenance spending and increased depreciation and financing costs;
• Net debt of £54.1bn, up from £51.3bn, owing to increased borrowing to fund investment;

Commenting on the financial results, chief financial officer, Jeremy Westlake, said: “The year marked the end of our five-year spending plan that saw the successful completion of thousands of investment projects across the country. A year that saw performance challenges, but with careful management and efficiencies made, meant that we stayed within our budget and remain on a firm financial footing as we look forward to the years ahead.”

Haines concluded: “I believe strongly in the power of the railway to do good – to help grow the economy, to connect communities and make a positive difference to the lives of individual people up and down the country. I am excited to be leading Network Rail as we work to deliver the world-class railway that Britain needs and the service that passengers and freight customers deserve.”