Rail shake up: 'special purpose vehicle' to develop East-West rail

East-West Rail

Government will set up a new special purpose vehicle with the aim of speeding up delivery of the delayed East-West Rail project. The new organisation will be responsible for designing, constructing and operating the route between Oxford and Cambridge, but it's unclear whether this will be an entirely private or government-owned entity.

Transport minister Chris Grayling will announce the new East-West Rail plans as part of a wider drive to improve rail services for passengers by giving train operating companies more control over rail maintenance. This is expected to take the form of new regional management teams made up of staff from Network Rail and TOCs for planning track and signalling work.

The new East-West Rail organisation will take control of the existing East-West project from Network Rail. The first phase of the scheme, establishing a new service between Oxford and London Marylebone via Bicester and Princes Risborough is finished, opening next week. The second phase of the Western Section has been delayed. The entirety of the Western Section was originally scheduled for completion by the end of Network Rail's Control Period Five in 2019, but Peter Hendy's review and reorganisation of NR's investment programme pushed the project to the 2024 end of CP6.

The Western Section will upgrade the line between Oxford and Bedford via Milton Keynes. Plans for the overall project also contain a Central Section between Bedford and Cambridge, which involves reinstating disused railway, plus long terms plans for an Eastern Section improving rail connections to Norwich and Ipswich. Network Rail has already consulted on its route plans for the Central Section.

Speaking on Radio 4, Grayling said: "We are taking this line out of Network Rail's control. Network Rail has a huge number of projects to deliver and we want this one to happen quicker, bringing in private finance, in a form to be decided." A statement issued by the Department for Transport ahead of Chris Grayling's speech today avoids mention of private sector funding, instead saying the new special purpose vehicle will work with the National Infrastructure Commission to identify the best way of delivering the project.

East-West Rail will deliver the design, construction and operation of the Oxford-Cambridge line, according to DfT, but its statement is unclear as to whether the new organisation will do this as an overseeing government-owned company, or whether private sector operators will be sought to supply the financing, construction and operation of the line.

Network Rail issued a response indicating that it sees the announcement as the setting up of a competitive challenge to its operations. “Competition must be at the heart of any organisation that wants to behave like a private sector business. Competition breeds efficiency and innovation and will further encourage our own teams to push aside the barriers holding them back," said NR's chief executive Mark Carne in a written statement.

Government's plans for East-West Rail follow on from publication of the NIC's interim report on development of the Oxford-Milton Keynes-Cambridge corridor, which called for a new joined up commitment on transport, jobs and housing in the region. The Chancellor's Autumn Statement committed £100m to help the Western Section and a further £10m to progress development of the Central Section.

"The latest announcement on East-West Rail comes as confirmation of a government commitment to opening the project at the earliest opportunity," said programme director for the England's Economic Heartland's Strategic Alliance, Martin Tugwell. "We welcome Chris Grayling's announcement. We all want the East-West Rail project delivered as quickly as possible, but we don't want to see the Western Section delayed further while a total rethink is done on how it's delivered. We're looking forward to working with him and whatever form the new organisation takes to get the project moving as quickly as possible."