Network licence conditions

The licence conditions cover a wide range of subjects. This section provides brief details about the licence conditions and their purposes. For more information see the network licence pdf icon PDF, 231 Kb.

Part A Network Management and timetabling

1. Network Management

This condition sets out Network Rail's core obligations to secure the operation, maintenance, renewal and enhancement etc of the network in order to satisfy the reasonable requirements of persons providing services to railways and funders. This is in respect of the quality and capability of the network and the facilitation of railway service performance.
This condition also includes some specific obligations for Network Rail to:

  • produce a delivery plan;
  • establish and maintain long term plans;
  • develop policies and criteria demonstrating how it will meet the core obligations;
  • maintain appropriate, accurate and readily accessible information about the relevant assets;
  • co-operate with potential operators or funders on allocation of capacity;
  • run an efficient and effective timetabling process; and
  • asset management policies and criteria to maintain, renew, replace, enhance and develop the assets.

2: Information for passengers

The purpose is for Network Rail to secure the provision of appropriate, accurate and timely information relating to planned and actual movements of trains on its network to enable train operators to meet their information obligations to passengers and prospective passengers, including when there is disruption. Also Network Rail must complete the arrangements for making temporary changes to the timetable (such as engineering works) at least 12 weeks before the change, unless this timescale conflicts with its core obligations in condition 1.

Read more about information for passengers

Part B Restrictions on activities

3: Financial indebtedness

This condition caps the amount of borrowing Network Rail and its subsidiaries enter into. The condition also limits the amount that Network Rail can borrow against its Regulatory Asset Base.

4: Financial ring-fence

Network Rail is restricted in the types of activities it can get involved in. It can carry out 'non-core' activities either with our consent or in accordance with a de minimis limit.

Read more about ring-fencing

5: Interests in rolling stock and train operators

The licence holder must not, without our consent, own or run any railway vehicle in Great Britain, except where it is used for the operation of the network.

6: Prohibition of cross subsidy

This condition prohibits Network Rail from giving or receiving any unfair cross-subsidy. Network Rail must ensure that there is no unfair cross-subsidy between its Network Business (defined in part 2 of Network Rail's network licence) and any of its other business/activities and maintain separate accounting records for these.

7: Land disposal

Requires Network Rail to gain ORR consent before disposing of any land.

Read more about land disposal

Part C Dealings with third parties

8: Stakeholder relationships

Network Rail must ensure that in its dealings with specified stakeholders, it acts efficiently and economically and in a timely manner with degree of skill, diligence, prudence and foresight. It must also cooperate with the Mayor of London and Transport for London on railway services, facilities and investment projects.

It must publish how it will deal with its stakeholders.

9: Non-discrimination

Requires Network Rail not to unduly discriminate between persons or parties.

Part D Information requirements

10: Information for ORR

Network Rail has to provide us with information we need to carry out our functions.

11: Regulatory accounts

Network Rail must provide us with information so that we can determine the licence holder's access charges and monitor its financial performance and financial position against our determination assumptions. Network Rail must prepare these statements in accordance with our Regulatory Accounting guidelines.

Read more about regulatory accounts

12: Annual and periodic returns

Network Rail must prepare and provide us with an annual return by a specified return date each year and publish it within one calendar month of the return date.

Network Rail must prepare and provide returns for each period not later than 21 days after the relevant period has ends.

13: Reporters

Network Rail must comply with any Reporter Guidelines issued by ORR. The role of the Reporter is to provide us with independent, professional opinions and advice on data relating to Network Rail's provision of railway services, with a view to us relying upon those opinions or advice.

14: Restricted use of information -Network Rail should not authorise access to or disclose any person's protected information without their consent, other than to specified people.

Read more about independent reporters

Part E Corporate matters

15: Governance

Network Rail must follow best practice corporate governance arrangements, so far as is reasonably practicable. It must comply with the relevant provisions and principles of the UK Corporate Governance Code. It must maintain a board of directors where 2 of the non-executive directors have substantial railway experience.

16: Management incentive plan-Requires Network Rail to have a management incentive plan. It must ensure that the level of remuneration of specified people, including directors, is expressly related to specified standards concerning their personal performance and Network Rail's performance to improve those standards.

18: Fees

Network Rail is required to pay us an annual fee.

19: Change of control

Network Rail must notify the Secretary of State and ORR if any person takes it over.

Part F Standard industry obligations

20: Insurance

Requires Network Rail to have insurance against third party liabilities on terms approved by us.

21: Claims allocation and handling

Network Rail is required to be party to approved arrangements for handling claims against operators of railway assets and allocation of liabilities among operators of railway assets.

22: Safety and standards

Network Rail must be a member of Rail Safety and Standards Board (RSSB) and party to RSSB's constitution agreement. It must comply with Railway Group Standards.

23: Environment

Network Rail is required to have an up to date written policy to protect the environment from licensed activities taking into account any guidance given by us.

25: Rail delivery Group

Network Rail must become a member of RDG and comply with its obligations.