UK

Network Rail report dismisses privatisation

Railway tracks near Clapham Junction in London Image copyright PA

The possibility of privatising Network Rail has been dismissed in a report into the organisation's future.

Last year Nicola Shaw, who led the review, said she could not rule out recommending privatisation.

Though the report opposed privatising all of Network Rail, which maintains Britain's railways, it said there were "options" for private investment.

The government welcomed the report's recommendations and said it would "respond in full later this year".

The report said its team had "dismissed privatisation of the whole company, and instead has focused on solutions that may be appropriate for certain parts of Network Rail as well as for specific enhancement projects".

It said options for this included allowing private firms to run part of the rail network for a fixed period.

Analysis

Image copyright PA

By Richard Westcott, BBC transport correspondent

Over the past few months Nicola Shaw has been telling me to expect "evolution not revolution". And that's exactly what she delivered.

So, no break-up of Network Rail and no full-scale privatisation.

But this report still says the company needs to change, to become less centralised and to find new ways of persuading private companies to foot some of its bills.

The argument is that shops, councils, businesses all benefit from better trains, so they should help pay for them.

That last bit is important. Network Rail was reclassified as a public sector body on 1 September 2014, a move that had a huge impact which no-one seemed to anticipate.

Overnight, it was stopped from borrowing from private markets when upgrade costs (inevitably) over-ran.

Effectively, their government credit card was maxed-out (at £41bn) and they couldn't raise more elsewhere.

Now they need to find other ways of paying for the long list of improvements they want to carry out.

The report called for "route devolution", giving parts of the rail network more power.

Routes - Network Rail's name for eight regions of Britain's railways - should also be "required and empowered to find local sources of funding and financing, including from those (such as local businesses or housing developers, for example) who stand to benefit from new or additional rail capacity", it added.

The report also said the needs of passengers and freight shippers should be "at the heart of rail infrastructure management", and the government should "clarify" its role in the railway and Network Rail.

'Waste of time'

Manuel Cortes, of the Transport Salaried Staffs' Association, said the review would not stop National Rail plans to "flog off station concourses, land or even its strategic electric grid".

Mick Whelan, of train drivers' union Aslef, said timing of the report's publication - shortly after Chancellor George Osborne's Budget speech - was chosen "in the hope nobody would notice".

"What a waste of time and money this has been," he added.

In the 2016 Budget document, the government said it "welcomes the recommendations of the Shaw Report, and will respond in full later this year".

The Office of Rail and Road also welcomed the report, saying it "sets an ambitious agenda for the future shape and financing of Network Rail".

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