Industry sees Shaw Report as pointing towards greater involvement for private sector to fill ‘shuddering’ rail funding gap left by reclassification




The Treasury and Department for Transport have published a consultation and scoping report into the future shape and financing of Network Rail setting out options from full privatisation to full state control.

Although the consultation headed by HS1 chief executive Nicola Shaw rules out no options, industry executives said the report set a clear direction based on attracting major private sector financial institutions to invest in the rail network.

The most radical option of a full stock market floatation was generally seen as “not a goer” by senior industry sources due to the need for government subsidy and its control of franchising policy. However there was consensus that the report was pointing to new funding and, potentially, ownership arrangements.

“Reclassification of Network Rail has brought Network Rail borrowing to a halt and that has left a shuddering gap,” Passenger Transport was told. “There is a real issue on how to attract funding on top of what government puts in.”

Views on how that should be achieved vary. “This is about how you attract private capital on a project or route basis – a long term infrastructure concession like HS1 is not a bad example,” one industry executive commented.

Another regarded Shaw’s ‘whole industry approach’ as pointing “less to Balkanisation of the railway”, opening the possibility of the government selling a stake in Network Rail or full or partial flotation. He added that the outcome of the review was “less likely to be about what is right and more about what is practically achievable to prevent investment in the industry stagnating”.


Related coverage in the latest issue of Passenger Transport:


Options set out for full and part privatisation
Consultation on future of Network Rail asks for views on new ownership and financing models to attract private sector funding and investment

‘Wholesale reform’ under consideration
Shaw considers Network Rail’s role and structure

David Leeder: Can we defuse the Doomsday Machine?
Nicola Shaw’s report on the future of Network Rail shows signs of getting past ‘Must Try Harder’ and addressing the difficult issues


This article appears inside the latest issue of Passenger Transport.

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