DISCUSSIONS over the future shape, organisation and role of Network Rail are being stepped up, after last week's announcement that the government-owned company cannot complete the schemes set out for the present five year budget period -- Control Period 5 -- because costs are running above estimates.
Two electrification schemes -- Midland Main Line and North Transpennine -- are on hold indefinitely, with Network Rail now concentrating its efforts on Great Western, where new electric trains will be arriving in little more than two years from now.
NR's new chairman Sir Peter Hendy will not be formally confirmed in the post until later this month at the company's AGM, but Railnews understands that he has already started to consider the way ahead for Network Rail.
The company's 'members', who were intended to represent the non-existent shareholders, are also stepping down, while Richard Brown will be representing the Department for Transport on the Network Rail board as a special director.
Fresh developments since the transport secretary's announcement on 25 June suggest that Network Rail has now become of the target of conflicting advice, as various parties in the industry jostle for position.
Richard Branson has taken the opportunity of imminent reform to urge that Network Rail should be broken up into regional companies, and that train operators like Virgin should be given the responsibility of maintaining the track on their routes.
The Sunday Times reports that directors are examining proposals for the creation of 'risk capital' at the company, quoting one 'senior government source' as saying "what they need is the discipline that comes with equity”.
Labour, meanwhile, has demanded to know when the Government knew that Network Rail was getting out of hand, alleging that it was aware well before the General Election. However, the Prime Minister said: "The first substantive conversation I’ve had about this was with Patrick McLoughlin when he came to talk to me about the need to change the leadership of Network Rail and his plans for Peter Hendy, who I think is an excellent choice."
Network Rail is not commenting on these reports, but industry observers believe more announcements could follow soon, possibly before Parliament rises for the summer recess.