Network Rail May Cut Investment If Recession Hits UK

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May 24, 2012, 08:59:20 AM

Recommended service - hourly, according to the GWRUS. Let's work towards that service and towards ensuring all services are used.

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Contingency plans are being drawn up that will allow Network Rail to scale back a near-£10bn pound expansion of the railway system in the event of a severe economic downturn (link below.)
http://www.rmtbristol.org.uk/2007/11/network_rail_may_cut_investmen.html#more

The Office of Rail Regulation said it expected the infrastructure company to mothball engineering projects if passenger demand fell. The regulator's comments follow a warning this year from a leading transport consultancy that the government's railway strategy could be derailed if turmoil in the debt markets caused a wider economic depression.

Funding of the Network Rail business plan is underpinned by the government's railway white paper , which outlined the spending formula for the network up to 2014. Under the Department for Transport proposals , government subsidy will fall over the period while the contribution from fares will nearly double.

By 2014, passengers will be paying for 75% of the cost of running the rail network. The reliance on passenger growth - a factor closely linked with the health of the UK economy - led to the TAS consultancy warning in its Rail Industry Monitor report in August that there was little room for error in the government's calculations.

Chris Cheek , the report's author , said yesterday that the outlook was gloomier amid downbeat statements from the governor of the Bank of England , Mervyn King , about the state of the UK economy. "If we had another recession like in the early 1990s, where the south-east was badly hit and demand for services fell significantly, then obviously there would be a serious problem for the funding outlook."

My worry would be that , in order to fund some of their projects , Network Rail might withdraw services and close stations & lines that they consider to be carrying "empty boxes around." (link below.)
http://www.rmtbristol.org.uk/2006/12/take_a_taxi_in_the_country_say.html

Quote :

"Running empty boxes around is not very environmentally friendly or cost-effective,' said Armitt. In return for cutting government spending on under-used lines and services, Network Rail is asking for £8bn to spend on enhancements from 2009 to 2014."

They have the power to do all of the above thanks to the new DfT Closure Guidance (link below.)
http://www.bbc.co.uk/dna/actionnetwork/F3641215?thread=2441627

It gets better (link below) :
http://business.timesonline.co.uk/tol/business/industry_sectors/transport/article2879666.ece

Rail industry leaders have accused the Government of wasting hundreds of millions of pounds and undermining the environmental benefits of rail travel by choosing diesel instead of electric trains.

Iain Coucher , chief executive of Network Rail, has written to the Department for Transport , describing its failure to electrify more lines as “very short-sighted”.

In the letter , a copy of which has been obtained by The Times , he says Britain risks being left with an outmoded , inefficient and increasingly expensive railway because the Government has “bet on the wrong type of fuel”.

Further quote :

"Ministers have admitted that some trains on rural lines, such as the diesel Sprinter, are less efficient than 4x4s because they are often almost empty. Douglas Alexander said last year when he was Transport Secretary: “If ten or fewer people travel in a Sprinter, it would be less environmentally damaging to give them each a Land Rover Freelander to drive.”In a reply to Mr Coucher, Mike Mitchell, the DfT’s rail director general, said: “It does not make sense to commit now to a very expensive national electrification programme which is not justified in an economic and business sense. We recognise that there may be advantages of further electrification on some routes.”

Here is a related Christian Wolmar article (08/01/2008, link below.)
http://www.christianwolmar.co.uk/articles/yorkshire/jan8,08.shtml

I was particularly struck by the following quote :

Quote

However, a downturn in the economy, or another series of confidence-busting terrorist attacks, could easily upset the train operators' calculations and cause a crisis in the industry.

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