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Network Rail make "encouraging" start in delivering CP6 savings
Network Rail make "encouraging" start in delivering CP6 savings

Network Rail make “encouraging” start in delivering CP6 savings

Network Rail has been praised by the industry regulator for its “encouraging” start to delivering £3.5 billion worth of savings during Control Period 6 (CP6).

The five-year funding period will see the largest amount of money invested into Britain’s railways.

In a letter to Andrew Haines, the Office of Rail and Road’s (ORR) Chief Executive, John Larkinson, said that, in the first six periods of 2019-20, £155 million of efficiency improvements have been made; Network Rail have forecast this to be £391 million for the full year, ahead of the £316 million target.

Mr Larkinson said: “This is encouraging progress and a welcome turnaround from CP5, based on strengthening of routes’ efficiency planning and delivery, and stronger central oversight.”

However, more work is still necessary, according to the regulator, because the efficiency challenge will almost double in the second year, and will rise higher still in the final three years of CP6.

If the £3.5 billion target of savings is to be hit, Network Rail will have to save £598 million in 2020-21, £910 million during 2021-22, £907 million in 2022-23, and £832 million in the final year of the funding period.

The ORR said challenges lie ahead in the next few months, “particularly in relation to the quality of a number of routes’ renewals efficiency plans, as these are critical to delivering the increasing efficiency challenge in year two, and later years of CP6.”

Elsewhere, the letter to Network Rail’s Chief Executive reveals renewals volumes were 10% behind plan for the first six periods of year one, though Network Rail is confident of recovering by the year-end.

The ORR is also exploring how efficiently Network Rail is engaging with the supply chain, considering there have been lower than anticipated work orders.

Mr Larkinson added: “The next four years have much more challenging efficiency targets and it is imperative that Network Rail stays focused, particularly on ensuring work to renew the railway is planned well in advance to maximise efficiency and provide a stable work plan for the supply chain.”

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