Network Rail announce "no more big projects"

[Taunton]

Network Rail is to move away from big projects in its next five-year funding period in favour of spending its cash on maintaining its current network.

http://www.bbc.co.uk/news/business-43044465

Looks like the end of mainstream electrification projects. And the money that was there for them seems to be diverted to more day-to-day tasks.

 

[snowball]

I think the BBC has misunderstood. See today's posts in this thread:

https://www.railforums.co.uk/threads/hlos-for-cp6-2019-24.143671/page-5#post-3333261

 

[daikilo]

I think the BBC has misunderstood. See today's posts in this thread:

https://www.railforums.co.uk/threads/hlos-for-cp6-2019-24.143671/page-5#post-3333261

I think the BBC has tried to correctly understand what NR wanted to say and has made a pretty good and concise attempt.

NR media release: https://www.networkrail.co.uk/feeds...vices-and-fewer-delays-in-its-five-year-plan/

I look forward to the more detailed version when the CP6 details are finally agreed.

Note: I can't think of another case where all-male teams are refered to as homogenous.

 

[snowball]

I think the BBC has tried to correctly understand what NR wanted to say and has made a pretty good and concise attempt.

I should have clarified that my remark was about the BBC's chosen headline "NR to put new projects on hold", which could give the impression "work on major projects to stop", and has been interpreted so by at least one poster on another forum.

 

[NSEFAN]

To be fair, it seems like a sensible approach. Far better to deliver projects properly the first time round, rather than do a hash job to meet politically-set targets and have to spend more time and money fixing it later.

 

[HowardGWR]

I think, having read the first of the NR reports, that folk here are misunderstanding what the NR Plan for CP6 is about. New projects (as opposed to deferred ones) will be sparse, but deferred ones will go ahead, as long as they produce the acceptable business cases in whatever their development stage is at next. This latter procedure is separate from this CP6 Plan.

 

[WatcherZero]

Indeed they are specifying about £25bn on renewals (25% increase), £25bn on maintenance and £10bn on enhancements (slight reduction) with most of the enhancement money unallocated in the SBP (to do delayed projects and more susceptible to ORR meddling before final SBP approval) they are also setting up the mechanism that further enhancements are then one off partner funded (plans do include a budget funding GRIP studies on requested interventions) rather than taken from the general enhancement pot, which should avoid the government asking them to do additional projects but without providing additional funding.

 

[Taunton]

Let us at least get away from the fiction that maintenance, and in fact renewals (as in like-for-like renewals) are somehow "investment" in the railway. Even ministers sometimes spout this nonsense from their civil service brief. They are not investment. They are just part of the continuing cost of maintaining a steady state. Investment is about additional capital features, new flyovers, additional mileage of electrification, that type of spending.

Let us also SUBTRACT from the value we are getting any features taken away. Every resignalling etc scheme seems to reduce the provision of emergency crossovers, etc, which is then a confounded disbenefit whenever they would have been useful but no longer there.

 

[daikilo]

Let us at least get away from the fiction that maintenance, and in fact renewals (as in like-for-like renewals) are somehow "investment" in the railway. Even ministers sometimes spout this nonsense from their civil service brief. They are not investment. They are just part of the continuing cost of maintaining a steady state. Investment is about additional capital features, new flyovers, additional mileage of electrification, that type of spending.

Let us also SUBTRACT from the value we are getting any features taken away. Every resignalling etc scheme seems to reduce the provision of emergency crossovers, etc, which is then a confounded disbenefit whenever they would have been useful but no longer there.

In strict accounting terms, renewals are investments whereas, as you point out, pure maintenance (such as regular tamping) is not.

Regarding signalling schemes, if the equipment is life expired then its replacement is an investment. Features which are not replaced are a reduction to the notional value of the asset. If the equipment is replaced before life-expiry and not reused elsewhere then there is a reduction in the value of the previous investment (leading to a write-off).

 

[HowardGWR]

In case it's useful, here's a link to all the docs about the Plan.
https://www.networkrail.co.uk/who-we-are/publications-resources/strategicbusinessplan/#downloadall

I formed my views expressed here after reading the 'Comprehensive Executive Summary' and also I looked at the Western and Wessex ones (parochially).

In the Western one the MD Mark Langman, in the foreword, states
' By the end of CP5 we will have electrified the route from Paddington to Reading, Bristol and Cardiff and from Reading to Newbury....'

I would have put it this way:
'By the end of CP5 we will have electrified the route from Paddington to Reading, Stoke Gifford and Cardiff and from Reading to Newbury'

See the difference?

 

[backontrack]

I wonder what this means for the Lentran Long Loop...

 

[Taunton]

In strict accounting terms, renewals are investments whereas, as you point out, pure maintenance (such as regular tamping) is not.

Disagree. If you replace the complete permanent way down to the sub-base, etc, you can get that classified as a renewal. But just replacing the CWR when worn, or the sleepers, is not. If you do a big slew, increasing speed at a curve, that is definitely investment.

Furthermore, I believe what you are describing is the tax treatment that HMRC allow. NR of course do not pay tax. I am describing an accounting perspective, and also real world.

It's an interesting one defining doubling the line which was double track from 1840 to 1990, then got singled in an economy drive, and is now having the double put back. If it's on the original formation I would say you would not get away with calling this "investment".

 

[D365]

It's an interesting one defining doubling the line which was double track from 1840 to 1990, then got singled in an economy drive, and is now having the double put back. If it's on the original formation I would say you would not get away with calling this "investment".

Which line are you referring to here?

 

[LNW-GW Joint]

Which line are you referring to here?

Saltney Jn to Rossett just about qualifies for this status.
Double from c1850, singled 1980s, redoubled last year.
There are others (two sections of the Cotswold line for instance, or the Loughor viaduct section in South Wales).

Does NR really pay no tax?

 

[BestWestern]

http://www.bbc.co.uk/news/business-43044465

Looks like the end of mainstream electrification projects. And the money that was there for them seems to be diverted to more day-to-day tasks.

And if that were the case, it would be a very decent policy!

When you have an intercity train falling off the track in a major London terminus location, and the cause is found to be that NR simply decided not to fix something that they knew was rotten because they preferred to go and put wires up elsewhere instead, it really is time to take stock.

 

[Peter Mugridge]

Which line are you referring to here?

I am guessing Aberdeen to Inverurie?

 

[CdBrux]

Let us at least get away from the fiction that maintenance, and in fact renewals (as in like-for-like renewals) are somehow "investment" in the railway. Even ministers sometimes spout this nonsense from their civil service brief. They are not investment. They are just part of the continuing cost of maintaining a steady state. Investment is about additional capital features, new flyovers, additional mileage of electrification, that type of spending.

So if you replace the signalling, but take the opportunity to so do with one capable of superior performance (shorter headways for example) and in particular one that is compatible to subsequent electrification where do those examples fall? Investment or maintenance?

 

[D365]

• Maintenance: repairing or replacing like-for-like.

• Investment: replacing equipment with something of a superior specification.

Sorted

 

[DarloRich]

Let us at least get away from the fiction that maintenance, and in fact renewals (as in like-for-like renewals) are somehow "investment" in the railway. Even ministers sometimes spout this nonsense from their civil service brief. They are not investment. They are just part of the continuing cost of maintaining a steady state. Investment is about additional capital features, new flyovers, additional mileage of electrification, that type of spending.

Let us also SUBTRACT from the value we are getting any features taken away. Every resignalling etc scheme seems to reduce the provision of emergency crossovers, etc, which is then a confounded disbenefit whenever they would have been useful but no longer there.

Investment is also about improving what is there. The replacement of sempahore signals with a modern system is a like for like replacement ( in that you have maintained signalling) however you have invested in better signalling technology. If you replace a line of wodden sleepers and replace them with concrete is that a like for like replacement ( sleepers) or an investment in better equipment? If you replace bullhead rail with CWR is that a like for like replacement ( rail) or an investment?

While I agree replacement ballast inst an investment there has to be capital spend obtaining new equipment, like tampers, to help with that work. They are upgraded over time and new and better models produced. Is that a replacement or an investment when a new one is bought?

In strict accounting terms, renewals are investments whereas, as you point out, pure maintenance (such as regular tamping) is not.

Regarding signalling schemes, if the equipment is life expired then its replacement is an investment. Features which are not replaced are a reduction to the notional value of the asset. If the equipment is replaced before life-expiry and not reused elsewhere then there is a reduction in the value of the previous investment (leading to a write-off).

Correct.

• Maintenance: repairing or replacing like-for-like.

• Investment: replacing equipment with something of a superior specification.

Sorted

Also correct