Network Rail cuts maintenance spending after net zero increases electricity costs

Telegraph

12 hours ago

Network Rail has slashed its maintenance budgets after the Government's net zero targets pushed up electricity prices.
Sir Andrew Haines, the chief executive of Network Rail, said rising electricity prices had forced the organisation, which looks after train tracks and stations, to 'focus more on refurbishment than renewal' in the coming years.
He said the change in focus meant more money had to be spent buying power for trains instead of replacing worn-out railway infrastructure.
A rail trade body chief described this as a 'consequence of Britain's broken energy policy'.
Writing in Network Rail's annual financial accounts, published this week, Sir Andrew said: 'We've seen our spend on traction power rise by 40 per cent, squeezing what we have left further.
'Our Control Period 7 plans reflected that, setting out that we are expecting to focus more on refurbishment than renewals, but with a continued focus on safety and performance.'
Control Period 7 is the name for Network Rail's £43.1bn operations and maintenance budget over the next four years. It covers everything from electricity for trains to buying new rails and revamping stations.
It comes as the country struggles with soaring electricity prices caused by net zero policies.
Ed Miliband, the energy secretary, has previously claimed bills are rising because of the price of gas used in some power stations.
Others point to the number of wind and solar farms being built, with Government officials guaranteeing to developers that high prices will be paid for the electricity those sites generate.
Steven Mulholland, the chief executive of the Rail Plant Association, which represents railway maintenance vehicle companies, condemned the shrinking maintenance budget.
He said: 'Network Rail's decision to cut back renewals and rely on patch-up repairs is a direct consequence of Britain's broken energy policy.
'Track renewal isn't optional. It underpins safety, reliability and growth. If the Government allows short-term costs to dictate strategy, it risks dismantling the supply chain we'll need to rebuild later at far greater cost.'
Freight firms fading
In July, The Telegraph revealed an electric freight train company was on the brink of collapse, partly because of high power prices.
Varamis Rail has suspended all operations and stopped paying its staff after finding it too difficult to compete against road freight, although it hopes to restart in mid-September.
Among the high costs it has faced are those for traction electricity used to power its trains, which, according to Telegraph analysis of Network Rail figures, doubled in price between 2020 and 2024.
Other rail freight companies have invested in ' bi-mode ' locomotives, which can run on either electricity from the overhead lines or an onboard diesel engine.
Operators of such engines, including GB Railfreight, which is currently introducing its bi-mode Class 99 locomotives into service, can therefore run them on whichever propulsion method is the cheapest, depending on diesel and electricity prices.
A Network Rail spokesman said power costs had increased by 50 per cent between the 2022-23 financial year and now.
He said: 'Although utility costs represent a larger share of our spending in this control period compared with the previous five years, they still represent a relatively small portion of our overall expenditure.
'It is true to say that wider inflationary pressures are having an impact, however. While a third of our income comes from Track Access Charges, which are subject to inflation, the remainder is fixed for the control period and the increase in costs from our supply chain and across the board over the past year means there is increased pressure on funding and therefore the amount of work we can deliver.'