Rail revamp plans in disarray

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Published: Thursday 25th June 2015 by The News Editor

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Rail improvement plans have been thrown into disarray after infrastructure company Network Rail (NR) admitted it had been “overly optimistic” about completing a five-year, £38 billion plan.

Transport Secretary Patrick McLoughlin responded by announcing that the plan was being “reset” because it was “costing more and taking longer”.

He told MPs that electrification work was being “paused” on the Midland mainline and on the Transpennine route between Leeds and Manchester.

He also announced a shake-up of NR management with chairman Richard Parry-Jones being replaced by London’s Transport Commissioner Sir Peter Hendy.

Mr McLoughlin also said that none of NR’s executive directors would receive a bonus for the past year.

In addition, Mr McLoughlin said he was appointing former Eurostar chief Richard Brown, who oversaw a review of rail franchises recently, as a special director of NR who would update Mr McLoughlin on the company’s progress.

The Transport Secretary also said he was asking economist Dame Collete Bowe “to look at the lessons learned”.

His statement came after NR chief executive Mark Carne said: “During my first year in the job I have looked closely at every aspect of our business and it has become clear that Network Rail signed up to highly ambitious five-year targets set by the regulator.

“Based on historic improvements from a low base, we were overly optimistic about the capacity of our company and our supplier base to step up several gears in order to achieve the plan, especially given the complexities of a network that is at full capacity much of the time.”

Mr Carne went on: “On the big items like electrification and capital projects, it was always part of the regulatory process that the costs and programme would be revisited as projects became properly defined.

“Unfortunately when these reviews have occurred, the more detailed project costs have been higher than assumed at the earliest stages of definition. As a result, the total enhancement programme cost now exceeds the available five-year budget. Some projects are also delayed beyond the original dates.”

Published: Thursday 25th June 2015 by The News Editor

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