Network Rail accused of short-termism with £1.5bn property sale

 

Network Rail is to sell its commercial estate – including railway arches and other property – for nearly £1.5bn resulting in a loss of £81m a year in revenue.

This will reduce Network Rail income by around £400m over a single control period and has prompted an angry reaction from Labour, which has called for a halt to the sale.

The rail infrastructure operator announced that it has agreed terms with Telereal Trillium and Blackstone Property Partners for the sale of its commercial estate portfolio in a transaction worth £1.46bn.

”Local

It said the cash will help fund the railway upgrade plan, ‘bringing major improvements for passengers and reducing the need for taxpayers to fund the railway’.

However, Network Rail has confirmed to Transport Network that the income from the commercial estate was £81m last year, suggesting that the sale will see it forego at least £400m in income over Control Period 6, from 2019 to 2024.

Labour’s shadow rail minister, Rachael Maskell MP, called on transport secretary Chris Grayling to intervene to prevent the sale.

She said: ‘The selloff of Network Rail’s commercial estate is a short-term decision that will undermine the financial sustainability of the railway and damage small and medium sized enterprises across the country. Archways are both an asset and a revenue stream for Network Rail so this move highly irresponsible.’

Network Rail launched the sale of its commercial estate last November. The estate is made up of around 5,200 properties, the majority of which are converted railway arches.

It said that the sites are being sold on a leasehold basis, with Network Rail retaining access rights for the future operation of the railway. Although Network Rail said the two firms have adopted a ‘tenants first’ approach, small businesses who generally rent the spaces have repeatedly raised concerns about rent rises.

Network Rail chair Sir Peter Hendy said: ‘This deal is great news – for tenants it will mean significant commitment and investment, and for passengers and taxpayers it will mean massive, essential improvements without an extra burden on the public purse.’

In 2015, Network Rail announced that it aimed to sell £1.8bn worth of ‘non-core’ assets to help plug a £2.5bn gap in its finances. As Transport Network has reported, it struggled to identify assets to sell, leading to the decision to sell the commercial estate two years later.

In Network Rail’s 2018 Annual Report and Accounts its managing director, property, David Biggs, disclosed that sales of ‘other assets’ during the year under its strategic disposals programme raised only £36.5m.

 

Also see

Register now for full access


Register just once to get unrestricted, real-time coverage of the issues and challenges facing UK transport and highways engineers.

Full website content includes the latest news, exclusive commentary from leading industry figures and detailed topical analysis of the highways, transportation, environment and place-shaping sectors. Use the link below to register your details for full, free access.

Already a registered? Login

 
comments powered by Disqus
 
 
highways jobs

Chief Executive

Luton Borough Council
Luton Borough Council
Recuriter: Luton Borough Council

Public Realm & Planning Team Manager

Camden London Borough Council
Up to £53,702
This is an exciting time for Camden’s Transport Strategy service! Camden, London (Greater)
Recuriter: Camden London Borough Council

Food Safety Environmental Health Officer

Camden London Borough Council
£35,913 - £41,657
As an Environmental Health Officer within Environmental Health, Business and Consumer Services... Camden, London (Greater)
Recuriter: Camden London Borough Council

Street Works Technical Officer

London Borough of Bexley
£20,667 - £24.999
We need a strong team player to assist the departments Street Works Team. Bexleyheath, London (Greater)
Recuriter: London Borough of Bexley

Food Safety Environmental Health Officer

Camden London Borough Council
£35,913 - £41,657
As an Environmental Health Officer within Environmental Health, Business and Consumer Services your focus will be food safety issues. Camden, London (Greater)
Recuriter: Camden London Borough Council

Project Manager and Research Officer

London Councils
£34,390 p.a.
Looking for a highly motivated, dynamic, enthusiastic and hardworking individual. London (Greater)
Recuriter: London Councils

Senior Development Engineer

Bristol City Council
£27,358 - £33,136
Bristol is an exciting, and culturally thriving Regional Capital City of Bristol
Recuriter: Bristol City Council

Executive Director Place & Economy

Peterborough City & Cambridgeshire County Councils
Competitive salary
The opportunity to combine major services across a city and a county to contribute to the delivery of future growth and Infrastructure Cambridgeshire
Recuriter: Peterborough City & Cambridgeshire County Councils

Head of Culture & Place

The Royal Borough of Kensington & Chelsea Council
up to £78,800 plus PRP
This could not be a more important time to join Kensington and Chelsea Kensington and Chelsea, London (Greater)
Recuriter: The Royal Borough of Kensington & Chelsea Council

Director for Cleaner, Greener & Cultural Services

The Royal Borough of Kensington & Chelsea Council
up to £103,500 plus PRP
This could not be a more important time to join Kensington and Chelsea Kensington and Chelsea, London (Greater)
Recuriter: The Royal Borough of Kensington & Chelsea Council

Director for Public Protection

The Royal Borough of Kensington & Chelsea Council
up to £103,500 plus PRP
This could not be a more important time to join Kensington and Chelsea Kensington and Chelsea, London (Greater)
Recuriter: The Royal Borough of Kensington & Chelsea Council

Head of Democratic Services

Ealing London Borough Council
£58,650.00 - £61,737.00
Ealing is an exciting place to live and work, and local democracy is at the heart of its success. Ealing, London (Greater)
Recuriter: Ealing London Borough Council

Director of Development and Environment

North Somerset Council
circa £125,000 p.a.
We are looking for an experienced and enthusiastic individual to maintain momentum on delivery of our regeneration and placemaking aspirations Somerset
Recuriter: North Somerset Council

Development Officer/Senior Development Officer

Solihull Metropolitan Borough Council
£28,221 - £35,229 / £33,136 - £41,846
Seeking an individual to lead on all aspects of Highways advice to a busy Development Management team Solihull, West Midlands
Recuriter: Solihull Metropolitan Borough Council

Highways Asset & Maintenance Manager

Brighton & Hove City Council
£42,806 - £46,326
Looking to recruit a new Highways Asset and Maintenance Manager Brighton, East Sussex
Recuriter: Brighton & Hove City Council

Commercial Manager

Leicester City Council
£41,846 - £44,697
Seeking for a Comercial Manager to work for the Leicester City Council. Leicester, Leicestershire
Recuriter: Leicester City Council

Senior Highways Development Engineer

Leeds City Council
£37,107 - £39,961
Seeking to appoint an experienced highways engineer or transport planner. Leeds, West Yorkshire
Recuriter: Leeds City Council

Trainee Deputy Editor of Bridge Design & Engineering

Bridge Design & Engineering
£24,000-26,000
Bd&e is looking for a structural or civil engineering graduate with a passion for bridges. Dorset
Recuriter: Bridge Design & Engineering

Strategic Transport Project Development Officer

Hull City Council
£36.153 - £39.002
Would you like to work in the successful UK City of Culture? Kingston upon Hull, East Riding of Yorkshire
Recuriter: Hull City Council

Project Lead

Hull City Council
£45.181 - £48.563
Would you like to work in the successful UK City of Culture? Kingston upon Hull, East Riding of Yorkshire
Recuriter: Hull City Council