Rail regulator praises Network Rail’s savings success

Nov 08, 2012


The company, whose national headquarters are next to Milton Keynes Central railway station, has achieved efficiencies totaling £775 milllion in the past three years.
The saving have come through a range of measures including the rationalisation of signaling and control centres and a reorganisation of rail maintenance, resulting in reduced staff and sub-contractor costs.
However, the ORR remains concerned at the punctuality of services, particularly on key routes, and at Network Rail’s ability to create efficiency savings in the management of bridges, tunnels and other major structures.
The ORR has called on Network Rail to work more closely with passenger and freight operators.
Chief executive Richard Price said: “"It is essential that the rail industry delivers significant improvements in value for money. Reducing the costs of Britain’s railways is vital to help ease the pressure on tax and fare payers and freight customers. We welcome the progress that Network Rail is making in improving its efficiency and that the company is currently on track to meet the stretching target we set for reducing its costs.”
To incentivise Network Rail to collaborate with rail operators, the ORR set up the Efficiency Benefit Sharing Mechanism. It has recommended that payments be made to Network Rail and the operators in recognition of savings made so far.
Network Rail group strategy director Paul Plummer said: “Millions of pounds have been saved helping to reduce the railway’s cost for taxpayers and farepayers alike. This progress is being delivered while also maintaining high levels of safety, performance and investment and we are determined to keep this momentum.”
The ORR has urged Network Rail to build on the savings achieved so far. Mr Price said: “The drive for efficiencies needs to be skilfully planned and delivered by the company so that its stewardship of the infrastructure and the performance of the network do not suffer.
“We expect Network Rail to deliver improved performance and meet its targets by 2014, and will keep up the pressure on the company to do so.”
Mr Plummer said: “That task is getting ever harder as growth and resulting congestion become more challenging to manage. The railway’s popularity is a good thing that is to be welcomed but we, and our train operating company colleagues, cannot afford any complacency as there are yet more challenging targets ahead.”
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