The Initial Industry Plan (IIP) sets out how the industry could build on recent improvements in cost efficiency and cut the cost of running the railway by £1.3bn per annum by 2019. These savings, combined with growth, could see the annual cost of the railway to the taxpayer reduced. This would be achieved through initiatives already in hand, greater cross-industry collaboration and changes in the way government procures passenger rail services.
By making rail more affordable, the plan gives governments the chance to make choices on the balance between investment, fares and subsidy when taking decisions on future transport policy. Network Rail, train operators and industry suppliers believe continued investment in rail would deliver major benefits for the country and they set out options for investment which if adopted in full would:
• Stimulate economic growth by linking better the UK’s big cities - providing an additional 180,000 seats at peak time* - and accommodating a 30% increase in rail freight tonne kilometres
• Maintain high levels of reliability and safety, focussing on areas in particular need of improvement
• Better meet passengers’ needs in key areas such as journey information, comfort and accessibility to drive continued improvement in customer satisfaction
• Reduce the industry’s carbon emissions per passenger kilometre by 25%.
The full range of investment options includes completion of key projects already under way, such as Thameslink, Crossrail and committed electrification schemes, valued at £4.9 billion in the five-year control period to 2019.
It also includes proposals with a value of up to a further £5.6 billion, such as the Northern Hub and electrification of the Midland Main line and North Transpennine. These investment proposals could generate social and economic benefits for the country worth 4.5 times the cost of the schemes.
Paul Plummer, group strategy director, Network Rail said: “The railways are booming with more and more people choosing rail. Closer collaboration within the industry will deliver even more efficiencies. This revenue growth and improved efficiency taken together provide governments with real choices to consider, choices around the appropriate balance between investment fares and subsidy,.”
Michael Roberts, chief executive of the Association of Train Operating Companies said: “Rail has a bright future in supporting a successful green economy in the years ahead. This plan shows how we can do that by providing a better quality of service to growing numbers of passengers at a more affordable cost. We look forward to working with government to ensure the right framework is in place to make this possible.”
Lindsay Durham, chair of the Rail Freight Operators Association, said: “The last few years have seen considerable growth in moving freight by rail, as UK industry gains competitive and environmental benefits from freight trains. With the initial industry plan forecasting further strong demand, the importance of rail freight in helping UK manufacturing grow is essential. The freight operators and Network Rail will deliver efficiencies to offer UK industry with a competitive service, while focused investment in the network will deliver further significant modal shift to rail over the coming years.”
Jeremy Candfield, director general, Railway Industry Association said: “This plan shows that the railway industry can work together in a genuine partnership to improve efficiency. Strategic planning and greater certainty of future workloads are vital to the delivery of the further cost reductions that we all want to see.”
The IIP is the first major step in the process that will inform decisions to be made by governments and the Office of Rail Regulation affecting the railways in control period 5, 2014 to 2019.