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June 25, 2015

UK Government delays Network Rail upgrades

The UK Government has announced that it will delay or reduce a number of planned modernisation projects for railway infrastructure operator Network Rail.

The UK Government has announced that it will delay or reduce a number of planned modernisation projects for railway infrastructure operator Network Rail.

Network Rail’s five-year £38bn investment programme is running behind schedule and over budget on several major projects. The operator controls around 2,500 stations, as well as tracks, tunnels and level crossings.

The electrification of the Midland mainline from London to Sheffield, and the TransPennine route between Manchester and Leeds that connects major cities across the north, will be postponed.

The UK Transport Secretary Patrick McLoughlin said that the electrification of the Great Western line from London to Wales and south-west England remained a top priority.

There would be a full review of NR’s processes in estimating costs after missed targets and overspending on electrification works.

He noted that electrification is difficult, the UK supply chain for the complex signalling works needs to be stronger, and construction rates have been slow.

NR has also taken longer to obtain planning consents from some local authorities than expected and all of these problems could and should have been foreseen by the company, McLoughlin noted.

McLoughlin also announced that Network Rail chairman Richard Parry-Jones would leave the group after he has finished three years in the role in July and told MPs none of the executive directors would get a bonus for the past year.

Parry-Jones will be replaced by the current commissioner of Transport for London Sir Peter Hendy, who will review the company’s programme of rail investment and report by this autumn.

McLoughlin said: "The current transport commissioner in London Sir Peter Hendy is someone of huge experience, who helped keep London moving during the Olympics, he will be a huge asset to Network Rail in overseeing their delivery in coming years."

The government has also decided to simplify NR’s governance by ending the role of the public members.

Hendy said: "Network Rail has a critical role in the railway industry and the whole British economy, by facilitating economic growth and enabling job creation.

"I am delighted to be asked to chair the board and help it, the executive team and the whole organisation fulfil Network Rail’s full potential. I am looking forward to working with Mark Carne as he takes the organisation forward."

Commenting on this, Virgin Group founder Sir Richard Branson was reported by the BBC as saying that Network Rail is too big and should be broken up into regional units.

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