In December 2016, Network Rail CEO Mark Carne commissioned Professor Peter Hansford, Chair of Construction and Infrastructure Policy at CPM, to carry out an independent review of contestability and third party investment in rail infrastructure delivery.

The report - Unlocking rail investment: building confidence, reducing costs [pdf] - considers barriers to opening up the UK railway for additional private investment, and how these might be addressed. The review explores how to encourage competition into railway projects and attract more private sector involvement to fund and finance Britain's railway projects.

The Hansford Review was undertaken on the principle that a more contestable market for rail projects will improve innovation, cost performance and competitive delivery by increasing pressure on Network Rail and its suppliers to deliver value for money. More contestability in the market would also provide additional opportunities for third party project investment and delivery. The review explores how this could provide a much needed boost to railway infrastructure funding and reduce costs, and sets out recommendations for how to achieve greater contestability.

I am...determined to find ways for the private sector to directly invest in railway projects. As a government owned business, this has some challenges, but by unlocking private finance we can potentially deliver railway improvements that would otherwise not be possible.- Mark Carne, Network Rail's Chief Executive Officer

Network Rail have accepted Prof Hansford’s recommendations in full, with next steps set out in their response Network Rail open for business. Planned reforms include:

  • Introducing flexibility to railway standards to encourage innovation and reduce costs, while maintaining commitment to safety
  • Creating a service level agreement to clarify Network Rail’s legal obligations for third parties
  • Publishing a regular pipeline of third party project opportunities for investment, funding and delivery

Peter Hansford, who was chief construction adviser to the UK government from 2012 to 2015, said:

"Increasing contestability and removing barriers to investment in rail infrastructure will realise benefits for Network Rail, government and ultimately for rail users. Third party investment will inject essential additional funding for projects and will improve value for money by applying competitive pressure. Network Rail’s new reforms in response to my recommendations are a vital next step in taking this forward."

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