Dispose with care

12 October 2018

By Les Waters, Licensing.

Les Waters, LicensingA significant amount of land is needed for the operation and support of the railway; not just the land where the tracks and stations are sited, neighbouring land can also be essential. As time goes by some of this land may become surplus to operational use and Network Rail may consider selling it. This is where ORR has a very important role to play in ensuring any deals are in the public interest and as such, Network Rail must seek our approval.

Network Rail’s Project Condor

There are many sites within Network Rail’s property portfolio that have no major significance in the operation of the railway, however, they still generate income as commercial lettings. Network Rail’s ‘Project Condor’ recently attracted plenty of publicity when they decided to dispose of the majority of their rental business. These commercial lettings were mainly located within railway arches all across England & Wales and the decision to sell was taken in order to raise the money needed to carry out enhancement of the railway and streamline the costs of managing the remainder of its estate.

Our role

For Network Rail to carry out Project Condor, or any other disposal of land or property rights, it must comply with the land disposal condition in its network licence (condition 7). Our controls protect land that may be required for future development of the railway network and prohibit disposals where it is against the public interest.

We do not regulate the market values of any such deals but, in general, we expect Network Rail to seek to maximise the value of its assets and thereby minimise subsidies that are ultimately borne by taxpayers.

Through Condition 7 of its network licence, Network Rail must gain our consent to a proposed property disposal before it completes the transaction. There is a long history of cases where we have either given our consent, refused to do so, or where Network Rail has withdrawn its proposals. You can find out more about our land disposals work on our website.

In the case of Project Condor, although the lease will be for 150 years, Network Rail will retain access rights to the properties as needed to support the continued operation of the railway. By doing this, Network Rail will meet the terms of our consent and so secure the future supportive role that railway arches have in the railway network across England and Wales.

ORR’s regulation of Network Rail’s land disposals is not just focused on railway arches; our ongoing role covers all types of Network Rail’s property and land. Our safeguards will continue to act against the disposal of land where there is a reasonably foreseeable railway use for it and in so doing help protect the future of the railway.

Railway arches