{"id":155021,"date":"2024-12-05T20:00:00","date_gmt":"2024-12-05T10:00:00","guid":{"rendered":"http:\/\/www.vibewire.com.au\/?guid=c76194dbad054f8892626c2cf059beb8"},"modified":"2024-12-05T20:00:00","modified_gmt":"2024-12-05T10:00:00","slug":"benchmarking-network-rails-costs","status":"publish","type":"post","link":"https:\/\/www.vibewire.com.au\/?p=155021","title":{"rendered":"Benchmarking Network Rail’s costs"},"content":{"rendered":"

Benchmarking Network Rail's costs<\/span>
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ORR's latest analysis provides an important check on the costs of delivering rail infrastructure maintenance and renewals.<\/div>\n
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The financial and economic performance of the rail network really matters for users, funders and the wider economy. Given the recent challenges from inflation, climate change and weather, industrial action and recovery from the pandemic, this has never been more important.  <\/p>\n

Our reporting and analysis provides scrutiny and insight to the financial health and performance of the national rail infrastructure. For example, in October we published our Annual efficiency and finance assessment of Network Rail 2024<\/a> and reported that, despite the pressures on the rail network over the last five-year control period, Network Rail delivered \u00a34.0 billion of efficiency improvements.  <\/p>\n

Another area of focus during the control period is annual benchmarking of Network Rail\u2019s maintenance and renewals costs. Our latest report, Benchmarking of Network Rail\u2019s costs<\/a>, is part of how we do this.  <\/p>\n

Our analysis shows that maintenance expenditure increased by 3% per year in real terms since 2010-11 and renewals expenditure also increased over the same period but at a lower rate (of around 2% per year) and is more variable than maintenance spend. However, it is not possible to infer efficiency from the observed trend in total expenditure itself, because this does not control for volume of work, traffic levels, input prices and so on.<\/p>\n

When controlling for underlying cost-drivers, we find that regional maintenance expenditure (averaged across regions) in the latest year was below the modelled long-term average, which could suggest a recent improvement to efficiency.  Nevertheless, maintenance expenditure at seven of Network Rail\u2019s maintenance delivery units (MDUs) lies outside the range we would expect from our cost modelling (three lie below and four above). This analysis provides insight into the scope for productivity gains by lower performing MDUs, for example, through ways of working and technology adoption.<\/p>\n

Turning to renewals we are able to look at these on a unit cost basis, not just at an overall expenditure level. On this basis, there has been a 7% average annual increase in the unit cost of conventional track renewals since 2014-15 (in real terms), but this reduces to a 3% annual increase after controlling for factors such as track length and extent of electrification.  <\/p>\n

Looking ahead<\/h2>\n

We will continue to develop our benchmarking analysis in CP7 and welcome views on the analysis in our report.\u202fPlease send these to contact.cct@orr.gov.uk<\/a>. <\/p>\n<\/div><\/div>\n<\/div>\n

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Downloads<\/h2>\n<\/div><\/div>\n
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Cost benchmarking of Network Rail's maintenance and renewals expenditure: annual report 2023 to 2024 (pdf 1.1 MB)<\/a><\/div>\n

Published 5 December 2024<\/span>\n<\/div>\n

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