Out-Law / Your Daily Need-To-Know

Out-Law News 1 min. read

Government announces rail spending plans


The Government has announced that it will spend £4.2 billion on new rail schemes including electrification of lines in England and Wales; upgrading of the network around Manchester, and station upgrades. 

The Government said that the schemes were in addition to previously announced measures which will cost £5.2bn.

"These plans to increase capacity and shorten journey times on intercity, commuter and freight services are, alongside our plans for high speed rail, absolutely key to securing our country's prosperity in the decades ahead," said Transport Secretary Justine Greening.

Prime Minister David Cameron called the full £9bn programme "the biggest modernisation of our railways since the Victorian era".

Infrastructure expert Jonathan Hart of Pinsent Masons, the law firm behind Out-Law.com, said that the measures were long expected.

"Many of these plans are things which the industry would have expected, and in many cases includes work that has already been committed to and contracts which have been awarded," he said. "There is perhaps less new work for construction companies to get excited about than the headlines might suggest."

"As always, the important thing for the Government to work on is getting this work to market quickly, which means making sure the tender process is run quickly and the contractor selected quickly," said Hart. "This is important for construction companies who are in crisis and laying off staff and need their order books filled."

Projects that the Government said are new include upgrades to stations and tracks including a £350 million lengthening of platforms at London Waterloo station; £240m worth of improvements to the East Coast main line; the creation of an 'electric spine' from the Midlands to the south coast, and the extension of electrification from Cardiff to Swansea.

The Government said that the programme would be paid for partly by increased fares and partly by the "substantial efficiency savings which projects like electrification will have on the long term operating costs of the railways".

"There has been talk about some of these new projects being funded by 'efficiency savings'," said Hart. "These kinds of announcements often are treated with suspicion and cynicism, however it is important not to forget that Network Rail is effectively a type of regulated utility and subject to the similar constraints as utilities in the energy and water sectors."

"There are some lessons that can be learned and are being learned in this respect, most notably in Network Rail's exploration of adoption of 'alliancing' models for procurement as a way of encouraging productivity and securing lower costs in the supply chain," said Hart.

We are processing your request. \n Thank you for your patience. An error occurred. This could be due to inactivity on the page - please try again.