Network Rail sell-off to fund upgrades

Plans to electrify some parts of the Great Western route won't be finished for years

Network Rail wants to sell £1.8bn of railway arch space, disused depots and shop space in bigger stations to help raise the cash to upgrade UK railways.

New chairman Sir Peter Hendy came up with the idea after he was drafted in this summer to rescue the company's disastrous £12.5bn enhancement plan.

He says by selling off non-core bits of property, Network Rail can now deliver "the bulk" of the planned programme.

It is the biggest SME (small and medium-sized enterprise) UK landlord.

When Sir Peter came on board, costs had been spiralling and deadlines slipping because Network Rail promised major changes by 2019 that it simply could not deliver.

New trains

Sir Peter has warned that "some projects will cost more and take longer than originally expected".

One critical scheme, the plan to electrify the line from Swansea to London, has been dogged with delays and extra costs.

The first budget estimate was £640m. It now stands at £2.8bn.

Work on the core part of the line, to Cardiff, should be finished by 2019, Network Rail says.

But new, multi-billion pound intercity trains are arriving more than a year before that.

It raises the embarrassing prospect of sparkly high-speed trains initially providing a slower service because they can't run on electricity for the whole route.

Other all-electric versions could be idle for months.

Borrowing problems

Meanwhile, plans to electrify other parts of the Great Western route, to Oxford (from Didcot), Swansea and the loop to Bath and Bristol Temple Meads, will not be finished until some years later.

Network Rail has struggled since it became a public body last year.

That was a move that immediately turned the funding taps off, because it could no longer borrow cash on the private markets. Instead, its £38bn debt went onto the government's books, and ministers refused to lend bosses any more money.

The Department for Transport will begin an eight-week consultation on the report next month.