The Association of Train Operating Companies has put forward a proposal that would see Network Rail broken up into ten regional infrastructure companies. According to ATOC, Network Rail’s plans to devolve responsibility from its head office to regional managers does not go far enough in assisting to achieve savings of £1bn, as identified in McNulty’s interim report.
The ten companies would be regulated and licensed by the Office of Rail Regulation and be based on Network Rail’s existing routes. This could be implemented as soon as 2014. The reforms would also see operation of signal boxes and lines removed from Network Rail, with the possibility that they may, in time, come under the control of TOCs. It is envisaged that the companies would be listed on the Stock Exchange and that investors would find them an attractive proposition.
Vertical integration is also mentioned in ATOC’s proposals with the South West, Kent, Merseyside, Greater Anglia and Scotland mentioned as possible candidates for unified control of track and train. There is also a possibility that franchises such as West Coast and East Coast could be replaced with long term concessions.
If ATOC’s proposals go ahead the ten companies would have full budget autonomy and authority to progress renewals and enhancement schemes.
This would in turn allow local managers to progress more quickly and effectively those initiatives that matter most to passengers, with greater input from TOCs and without the requirement to go through Network Rail’s centralised approval process.
Network Rail would remain as a central body, governed by the rail industry and transformed into a service provider for TOCs and infrastructure companies.
Sir Roy McNulty’s Value for Money review of the rail industry is expected to be published in the near future.
