Britain
predicts. “This means we will have more than halved our costs and met the savings attributed by McNulty to NR.”
Higgins lists a number of measures which will enable NR to achieve
this target: a review of asset
policies improving work
scheduling greater standardisation creating a more multi-
skilled workforce adopting a risk-based
approach to maintenance producing better asset information and using it
more effectively harnessing technology, and providing better support to front line
business units and removing duplication.
Both passenger and freight traffic are continuing to grow strongly despite the poor state of the British economy, which continues to dip in and out of recession. Figures released by ORR last month show that passenger-km grew by 2.8% between October 1 and December 31 2012, while revenue generated by the passenger franchises soared by 8.3% to £1.96bn. Freight has also been growing with tonne-km reaching 21.43 billion for the last four quarters, compared with 20.68 billion for the previous year. This success is putting great strain on the network and the focus is on
The rebuilt London Bridge station will have a much larger concourse than it has today.
restoring capacity lost during the British Rail austerity period and removing the worst bottlenecks. But NR’s ambitious capital expenditure programme is pushing its debt inexorably higher with net borrowings currently at £28bn compared with assets of £45.3bn. I asked Higgins if this level of debt is starting to give him sleepless nights.
“Raising funds like this is the most
efficient way to fund railway investment,” he responds. “We raise capital against the value of our regulated asset base (RAB) to fund rail improvements which in turn improves the value of the RAB as well as helping to drive economic growth. Therefore, although NR’s debt levels are growing,
New platforms and access bridge take shape at Reading, which is undergoing major redevelopment to increase capacity.
given that its RAB is growing as well, these levels are sustainable under the regulatory framework, and our debt to RAB ratio remains lower than the 75% target set by the ORR.”
Higgins says NR’s funding model is used by other infrastructure heavy industries in Britain. “Compared with these, our debt to RAB ratio is similar to National Grid and lower than some water, gas and electricity distribution companies,” he explains. NR has an increasing number of major investment projects underway and planned. These include the reconstruction of Reading, Birmingham New Street, and London Bridge stations, the latter a crucial part of the Thameslink scheme, NR’s involvement in the London Crossrail project, the Northern Hub centred on Manchester, and a rolling electrification programme. The question is whether NR has
sufficient resources to complete all this work. For example, very little electrification has been carried out in Britain during the last decade or more, so are there enough engineers with the skills needed to carry out such a large programme?
“I believe we have built a great
reputation for project delivery during the current control period, at a time that has seen some extraordinary project challenges,” he replies. “For example, we have transformed stations like London King’s Cross and London Blackfriars along with delivering the first stages of Thameslink and Crossrail. This is alongside complex projects like Birmingham New Street and Reading and designing and planning the electrification works already announced. “But you are right to say that CP5 has
20 IRJ April 2013
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