CPA Bulletin

www.cpa.uk.net CPA Bulletin > May 2023 53 RAIL PLANT ASSOCIATION: 2 stream to look at enhancements. In the past, this has often been beneficial to the overall asset condition as many old assets were renewed under the banner of enhancements to increase line speed, electrify the railway, extend platform lengths, etc. Enhancements schemes are largely commissioned and funded by the Department for Transport (DfT). The DfT manages an extensive portfolio of enhancements including Network Rail, National Highways, HS2, East West Rail, TRU, etc. and is expected to stay within an overall funding envelope set by the Treasury. It has recently been reported that HS2 is overspending against its budget and looking at options to manage this themselves. In the event that additional funding is required from DfT for HS2 then this will have to be found from across the wider portfolio. This could, therefore, mean that the enhancements funding for Network Rail is lower than has been typical in other control periods. Even if enhancements funding is available, with passenger numbers at reduced levels post Covid-19, it could still be challenging to justify some enhancement schemes until passenger numbers return to pre-Covid levels. In summary, CP7 should see maintenance, works delivery and renewals volumes at similar levels to those seen in CP6 but enhancement volumes could be significantly below the normally expected levels. This may have a significant impact on the supply chain which relies on this work. There are perhaps some brighter skies on the horizon as the HS2 works move onto the significant enabling works on Network Rail’s infrastructure, such as at Crewe, and once the rails are in place on HS2 then it will need far more support using railway plant rather than the current civils plant. The national push for carbon neutrality by 2050 will no doubt involve significant volumes of electrification of the railway at some point but this does not look imminent. So, overall, the outlook for the supply chain looks like a busy final year closing out CP6 followed by a number of quiet years as enhancements funding is potentially reduced in CP7. Towards the end of CP7, and into the beginning of CP8, enhancements funding could pick up. For many years, the supply chain has challenged its clients to reduce the boom and bust cycle of renewals and enhancements. It feels like we are heading into another boom and bust cycle during CP7.