The not-for-profit company, which owns Britain's railway tracks, stations and signals, said it would be able to cut costs by nearly £1bn a year but still needed the extra funding to make essential improvements, particularly to overcrowded commuter routes in the south-east of England.

The Department for Transport forecasts that passenger numbers will increase by a further 30% over 10 years. "The time has come to deal with the growing demands being placed on Britain's rail network," said Network Rail's chief executive, John Armitt. In total, Network Rail is asking the government for just under £29bn.

Almost half of the extra £8bn will, if approved, be spent on the extension of the Thameslink commuter system.

Network Rail, which took over Britain's railway tracks from Railtrack four years ago, wants to triple the number of trains operating on the Thameslink system to 24 an hour but said much of the work was needed to keep the system functioning even at its present capacity. "There is not a 'do nothing' option on Thameslink," Mr Armitt said.

The request for more money was made as part of Network Rail's business plan for the period from 2009 to 2014. It begins a two-year negotiation between the Department for Transport, Transport Scotland, the Office of Rail Regulation and the rail operators. The DfT and Transport Scotland will publish responses next year.

Network Rail announced that efficiency savings would reduce the costs of running the network by £4.2bn compared with the period from 2004 to 2009. For that period, Network Rail received £25bn from the DfT. The company made a pre-tax loss of £232m in 2005.

The Office of Rail Regulation had been expecting Network Rail's funding to be cut. Last December, it said in its own assessment that it expected Network Rail would require between £17bn and £20bn to maintain the serviceability and performance of the rail network.

Chris Grayling, shadow transport secretary, said the rail network had already received too much money from the taxpayer in recent years. "We need better value for the money we are already spending and should not just carry on pouring cash into what is increasingly looking like a financial black hole," he said.

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Network Rail asks for an extra £8bn

The Times: July 04, 2006
By Angela Jameson, Industrial Correspondent

NETWORK RAIL has pledged that rail costs will fall after 2014, if it is allowed an £8 billion increase in its five-year funding plan from 2009.

The not-for-profit rail infrastructure group has asked the Office of Rail Regulation for an extra £7.9 billion of funds for the period from 2009 to 2014, on top of the £20.7 billion the company would need anyway.

The Conservatives attacked the request, saying that Network Rail should concentrate on cutting costs and delivering better value for money before demanding more investment.

Chris Grayling, Shadow Transport Secretary, said: ?The rail network has already had billions of pounds extra from the taxpayer in the last few years. We need better value for the money we are already spending, and should not just carry on pouring cash into what is increasingly looking like a financial black hole.?

Network Rail argues that it should receive the extra funding because it has managed to reduce the costs of running the existing network by £4.2 billion. The group received £25billion in the current five-year control period, but says that it needs only £20.7 billion to carry on business as usual for five years from 2009.

However, it argues that there is a one-off opportunity to build several major projects, which would relieve overcrowding on the network.

John Armitt, chief executive of Network Rail, said: ?The time has come to deal with the growing demands being placed on Britain?s rail network. We have seen remarkable growth over the past ten years, 40 per cent more passengers and 60 per cent more freight, and we are predicting similar increases, some 30 per cent, over the next ten years.?

About £3.5 billion of the extra £7.9 billion would go towards upgrading the Thameslink service from the South coast to Bedford. The Thameslink improvements, which have been delayed for more than six years, are the subject of a public inquiry due to report this summer. ?This project is ready to go, is much further advanced than Crossrail and will cost a lot less for similar benefits,? a Network Rail spokesman said.

The Thameslink proposals would see the service increase from eight trains an hour to 24, with the number of stations on the route doubled. The north-south route from Bedford to Brighton would be extended, serving towns from Bedford to Guildford in the south west and Dartford in the south east.

There are also proposals to redevelop London?s Waterloo station and Birmingham?s New Street station, as well as upgrading freight lines between the North and South of England.

Network Rail?s submission to the Office of Rail Regulation is the first stage in a two-year discussion with the independent regulator and the Government over funding needs.