Network Rail Ltd., the U.K. government-backed track and stations operator, said funding needs will increase by about 1.5 billion pounds ($2.4 billion) a year until 2019
Net borrowing reached 28 billion pounds to the end of September, up from 27.2 billion pounds in March, because of 2.1 billion pounds of capital spending driven by higher rail passenger traffic, the state-owned company said in an earnings statement. Network Rail is making plans for the five year period from April 2014 and Finance Director Patrick Butcher said he expects debt levels to grow.
“We see our debt continuing to rise at about the same level as it has through the last three or four years, which is going up a billion and a half or so a year,” Butcher said in a phone interview. “That’s driven by the fact that the railway is growing.”
The money is needed to upgrade work on Britain’s railways as passenger levels continue to rise, he said. Last year there were 1.3 billion train journeys on the network with some 25,000 trains running on its tracks each day, making the network the busiest since World War Two.
Current projects include a 6 billion-pound upgrade to the Thameslink line that spans London from north to south and the Crossrail project to build an east-west line through the capital, Butcher said.
Revenue totalled 3.2 billion pounds in the six months to September, compared to 3 billion pounds last year, with net operating income at 1.2 billion pounds, the company reported. The value of Network Rail’s assets rose to 45.3 billion pounds, up from 43.1 billion pounds in March.