Category Archives: Commercial

Network Rail CP5 Programme Budget Tops £35bn

As a steel fabrication business that is steadily building an enviable reputation by reliably building and installing steel structures for the UK Rail sector, DMG is delighted to learn that the Office of Rail Regulation (ORR) has issues there final determination of Network Rail’s Control Period 5  (2014 – 2019) with a budget of £35.5bn.Even without HS2 this programme will ensure that the many skilled suppliers to the rail sector can make sound investments in machinery and staff based on at least a 5 year return. Although pricing will undoubtedly remain very keen this scale of works that can only be delivered by seasoned vetted suppliers will at the very least stop the ‘race to the bottom’ that has sadly seen so many of our competitors fall by the wayside in recent years.With the highest level of investment being put into our rail network since the Victorian era there simply hasn’t been a better time to be involved in delivering projects for the rail sector.

HS2: What’s the Big Deal?

As a second tier supplier to the Rail sector we are obviously biased when it comes to HS2. There is no doubting that circa £40 billion of investment in our rail infrastructure will boost the economy by creating and sustaining a great many businesses like ours and of course keeping our skilled tradesmen and women gainfully employed.Much has been said in the press about the ‘massive’ cost of the High Speed 2 rail link between London and ‘The North’ but it may help to put this expense into perspective, not least of all by drawing a direct comparison with the current CP5 budget of circa £21 billion that has just been approved for Network Rail to invest in a range of general improvements across the UK rail network.Perhaps when we consider the costs of other major UK infrastructure projects we might begin to appreciate that HS2, whilst being a very substantial investment for the public purse, doesn’t seem like such a big deal with some perspective?HS2 £42bn (circa 330 miles) = £127m per mileChannel Tunnel £9bn (circa 30 miles) = £300m per mile (with no intermediate stations)HS1 £10bn (circa 67 miles) = £150m per mile (with 3 intermediate stations)Road Network Maintenance £2bn per yearIt is expected that the UK Gross Domestic Product across the span of the construction of HS2 will be in the region of £30,000 billion with the cost of HS2 accounting for just 0.15% of GDP.