Network Rail has established its property business as a company with its own board to help fill its funding black hole and allow the infrastructure operator to ‘focus on its core business’.
The new structure gives Network Rail Property greater independence to approve investments in Network Rail’s estate and make decisions about the disposal of property assets, which could include major stations.
A restaurant in a railway arch at Vauxhall, London
Network Rail said this will enable it ‘to ramp up its property activities to help generate £1.8bn to fund the Railway Upgrade Plan’ and provide greater focus on plans to deliver land for housing.
The board is chaired by Network Rail non-executive director Chris Gibb, with David Biggs as managing director.
David Biggs said: ‘A bigger and better railway requires significant investment and Network Rail is generating an extra £1.8bn to help fund the Railway Upgrade Plan, mostly through the sale of property assets where continued Network Rail ownership is not essential to running the railway. This means Network Rail can focus on its core business of running a safe, reliable and growing railway that is vital to Britain’s economic health.
‘Our new property company will have greater powers to unlock land for homes, drive economic growth in towns and cities and reinvest money into the rail network to help fund the Railway Upgrade Plan. It will mean that investment or asset disposal decisions can be made at the right level within the organisation in a timely way while ensuring appropriate oversight is in place.’
In November, following the Hendy review, Network Rail announced plans for a £1.8bn fire sale of assets and £700m of potential extra borrowing to fill a £2.5bn hole in its finances.
Last month Labour raised concerns that this could include the sale of major stations.
Although the new structure and governance arrangement went live on 1 April, Network Rail said: ‘The search has started for experienced property non-executive directors to join the board.’