THE Office of Rail Regulation has published its final determination of Network Rail's spending during the five years from April 2014. The headline figure is £38.3 billion, down from the £40.1 billion which NR had said it needed.

The total breaks down into £25.5 billion for maintenance and renewals, plus other costs such as traction current.

The remaining £12.8 billion is for enhancements, and this capital investment will mostly be accounted for by electrification schemes. However, there will also be some smaller projects which are intended to increase capacity, including the Northern Hub in Manchester.

The ORR said Network Rail could achieve savings worth around £1.7 billion, but even so the infrastructure operator will be funded to achieve PPMs of 90 per cent or better on commuter and regional services. The bar is a little lower for intercity services.

The ORR said the company 'will need to improve standards of infrastructure management, network resilience, and safety', and that the cost of maintaining the network must come down by around 20 per cent.

Network Rail is being told that it must achieve the savings by introducing new technologies, better management of the railways and more efficient ways of working, but the ORR issued a reassurance over safety, saying that the budget 'will not come at the expense of safety. There will be increased dedicated funding of £109 million to close around 500 level crossings and improve safety at hundreds more of the highest risk crossings in Britain. There will be around £250 million to help improve safety of track workers, to be invested in new equipment and safer working practices.'

Although today's determination is being described as 'final', and certainly brings a period of consultation to an end, Network Rail now has until 7 February 2014 to respond in detail and accept or reject it.

Network Rail chief executive David Higgins said: “The next five years for the railway will prove to be a critical challenge. A challenge to continue to respond to rising passenger demand and our need to grow and expand the network while at the same time juggling the ever harder challenges of improving performance, reducing cost and delivering huge investment projects from which substantial social and economic benefits flow.

“The determination has to be right to help the company, and the railway as a whole, succeed and deliver what’s needed by passengers, freight users and the taxpayer. We must now look at the individual targets within the determination as well as the package as a whole, and welcome the opportunity provided by the ORR to use the coming months to seek clarification and work through the detail.”