by John Armitt, Chief Executive, Newtork Rail
December 2006

Network Rail came into existence four years ago and the company has made good progress across the board in this time. Train performance has improved dramatically, costs have been significantly reduced and the railway has now taken over from air as the safest form of transport in the UK. The last year has built on this success, with the company adding to the results of previous years and showing big improvements in many areas.

The number of broken rails in 2005/06 was 317 compared to a peak of 952 in 1998-99 – a record low. Similarly, the number of signals passed at danger in 2005-06 continued the downward trend showing a record low of 325, it was many years ago that this figure was running at twice these levels. 78.6% of trains ran on time when Network Rail took over the rail infrastructure in 2002, that average yearly figure now stands at 87.4%, with the first half of 2006 seeing train punctuality averaging 90%.

This improvement in train performance has come about via better working relationships with the train operators. The majority of the UK network is now managed from joint control centres where Network Rail and train operators sit side by side ensuring that things run smoothly. We're also investing large sums in making the infrastructure better and more reliable.

The amount of work we do on the ground has increased enormously in recent years and last year was no exception. In 2005/06 we laid 723 miles of track, renewed 533 miles of ballast and replaced 682 switches and crossings. These are two to three times the volume achieved in Railtrack's day. All this has been achieved whilst implementing efficiency strategies throughout the business. Network Rail has cut the cost of running and maintaining the network by almost £400m over the past two years.

This, along with other savings, has helped the company deliver 20% efficiency savings since 2004, with the company well on course to make the 31% saving required by its regulator over its five year funding period. Despite all this engineering activity, the railway is busier than at any time in the past 50 years. There are over one billion passenger journeys per year: 42% growth in passengers, and 58% growth in freight, in the past 10 years.

MISSION ON TARGET

Our core responsibility is to operate, maintain and renew the infrastructure. This means making sure trains consistently run on time, investing in the rail network in a way that is as cost-effective as possible, and finding practical ways to maintain and renew the network with minimal inconvenience to the travelling public and freight users. We are getting there and the results speak for themselves. We are assessing every route across the network and making recommendations for how and where the railway can grow, so that still more passengers, and more freight, can be accommodated in future.

In producing the first industry-led Route Utilisation Strategies (RUSs), our objective has been to work closely with our industry stakeholders to develop plans which reflect the expected growth in demand. The results have been well received by the industry and stakeholders.

We recently announced plans to launch an ambitious multi-billion pound, ten-year modernisation scheme for our stations. The company has identified the need for up to £4bn of additional private-partner investment in stations across the network. This programme will enhance capacity at stations, improve facilities and provide opportunities for commercial development. Some of this work will benefit the planned 2012 Olympic Games in London. Hosting the Olympics will bring wider sporting, social and economic benefits and prestige to Britain. Delivering the infrastructure to support the games will have a positive knock-on effect for Britain's railway.

We are committed to delivering fast, frequent and reliable transport for the Games and this will be one of many benefits of the city hosting the world's greatest sporting event. We worked closely with the London 2012 bid committee to develop infrastructure plans to support hundreds of thousands of spectators, athletes and officials throughout the games and leave a lasting benefit for the city.

Development of stations at King's Cross and Stratford will improve capacity, reliability and the whole travelling experience into, across and out of London. Network Rail is ambitious to grow the railway. We are committed to delivering further efficiencies and to securing a value for money railway now, and for the future, but the prosperity of rail use and of the UK economy depend of significant investment in the years ahead. I believe we now have the confidence and competences to address the challenge of an increase in passenger and freight numbers.

We have laid out a sensible and necessary investment plan, and we are keen to play our part in delivering a healthy and prosperous country for years to come.