Government may privatise major stations
The government is considering selling some or all of Network Rail’s 18 managed stations. Following business press reports that US bank Citigroup – which specialises in divestments – had been brought in to advise the DfT, Clair Perry, a Parliamentary Under Secretary of State for Transport issued the following statement (in response to a written parliamentary question) on 26 February:
“Network Rail is exploring new models for station management and ownership with the goal to bring improvements for both passengers and the communities they serve. They have engaged Citigroup as advisors to consider a range of potential options but no decisions have been taken at this early stage. Any decisions on such potential future options will take account of the findings of Nicola Shaw’s report into the longer term shape and financing of Network Rail.”
Network Rail has over 2,500 stations and directly manages 18 of the largest; these include most of the major London termini plus some of the main provincial cities.
The reason for the move is understood to be NR’s burgeoning debt: It currently stands at £38bn but could top £50bn by 2020. The debt increased 14.5% in the last financial year 2014-15 (LTT 10 July 2015).
NR is already struggling to fund its ambitious investment programme for the current control period CP5 (covering 2014-2019). At this stage it is not known whether parts or all of the stations would be sold or leased.
Proceeds from sales could release billions and would help fund major infrastructure projects.
Since September 2014 NR has been part of the public sector; it has lost the semi-autonomous status it once enjoyed. Privatisation (both part and full) were some of the options considered in Nicola Shaw’s scoping (preliminary) report published in November 2015. Shaw will produce a more detailed report in spring (in time for the Chancellor’s Budget).
Other privatisation options under consideration include sales of individual routes: Greater Anglia, Essex Thameside and Wessex have been mentioned.
There are ten managed stations in London: Kings X; St Pancras; Euston; Paddington; Victoria; Waterloo; Charing X; Cannon St; London Bridge; & Liverpool St.
And eight elsewhere: Birmingham New St; Manchester Piccadilly; Liverpool Lime St; Edinburgh Waverley; Glasgow Central; Leeds; Reading; & Bristol Temple Meads.