Third parties and investors will pay lower fees to invest in rail network infrastructure and rolling stock under new rates published today by the Office of Rail and Road (ORR), the rail regulator, as part of wider work to boost economic growth.
Network Rail charges fees to cover the risks it takes on when a third-party funds or delivers work on the rail network. ORR’s deep dive review found that there is scope to reduce fees to ensure the risk fee funds are set closer to the break-even level. Today (30 September) ORR has published new rates for the relevant fees, setting out how much third parties will save.
Of the 11 relevant industry agreement types, fees for nine of them are being reduced. For example, for basic asset protection agreements using the Network Rail Fee Fund, where a customer leads straightforward, low risk delivery of works on the railway, the fee is being reduced from 5.0% to 2.4%. For development services agreements, which cover development and design work undertaken by Network Rail for a customer, the third parties will pay one tenth of the current fee (0.1%).
Taken together, the Government Actuary Department (GAD) which carried out an independent actuary review of the funds for the ORR estimates that, if relevant investment levels remain at 2025/26 levels, third parties could save £2-3 million per year. The new fees will be effective from 1 November.
Graham Richards, director, planning and performance, said: “These cuts to fees will have a tangible, positive impact on investment decision making into Great Britain’s rail network. This is a core example of how smart regulation can boost growth by making investment more attractive, while ensuring a good deal for the taxpayer.”
Image credit: ORR
