13 February 2009
Network Rail is set to cut costs by 21 per cent over the next five years, following a demand from the Office of Rail Regulation (ORR).
The regulator said Network Rail can spend about £28.5 billion from April 2009 to March 2014, £2.6 billion less than it had asked for.
"The task the ORR has set us is a tough one with ambitious savings to be made but we are determined to succeed," said Network Rail chief executive Iain Coucher.
It will spend £10 billion on maintenance and costs, £10.8 billion on renewals and £7.6 billion on increasing capacity and investment projects.
The ORR report found "large potential" for efficiency improvements calculated by benchmarking the infrastructure provider's costs against other international railway firms. It estimated improved procurement could contribute to 5 per cent of "readily achievable" efficiency savings.
Network Rail is currently working on its plan to explain how it will deliver the savings.