DESPITE earlier hints that Network Rail might launch an appeal to the Competition Commission, the infrastructure company has finally decided to accept the Office of Rail Regulation's £28.5 billion rail spending budget for 2009 to 2014.

Disclosing the decision, Network Rail’s chief executive Iain Coucher said: “The next five years will see unprecedented investment in expanding the network and improving services for passenger and freight users. The task the ORR has set us is a tough one with ambitious savings to be made and further service improvements to deliver, but we are determined to succeed.”

From 1 April 2009 to 31 March 2014 (control period 4, CP4), Network Rail will invest almost £7.6 billion on projects designed to relieve crowding by lengthening platforms and increasing capacity to enable more trains to run.

£10.8bn will be invested in renewals — replacing older parts of the network (rail, signalling, bridges) with new.

A further £10bn will be spent on day-to-day maintenance and the costs of operating and running the network over the period.

Network Rail said the ORR, in its final determination issued in October, set some challenging targets including:
- Delivering £7.6bn worth of rail expansion projects
- Increasing train punctuality to record levels — an average of 92.6 per cent of trains on time over a 12 month period by 2014
- Cutting costs by a further 21 per cent — on top of the 27 per cent savings the company has already achieved since 2004.

• NR defers ‘go-it-alone’ borrowing plan

Network Rail has deferred its plan to raise around £6bn of corporate debt without the support of a Government indemnity, blaming the “nature of the final [ORR] determination and its challenges, coupled with current market conditions.”

The company said the money will still be raised through the bond markets, but with the government indemnity attached.

NR said it “believes it is still in its best interest to raise totally independent finance and will continue to review the prospects of going to the market in its own right, later in CP4.”