Network Rail may have to drawdown on mammoth government funding facility
After shelling out millions in compensation to Britain's train companies, Network Rail is facing the embarrassing prospect of asking for a hand out from the government.
Last year, Network Rail drew down £7.5bn of borrowing from a department of transport (DfT) facility, more than doubling the amount it owes Chris Grayling's department, from £6.4bn to £14bn.
Network Rail can still draw a further £17bn against the total DfT facility of £31bn, according to the company's March 2016 financial statements.
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The former head of London transport, Sir Paul Hendy, revised Network Rail's budgets last year. However, industry sources said that Network Rail was already struggling to keep up, citing a shortfall of between £1bn and £2bn, according to reports in The Sunday Times.
Sources close to Network Rail indicated that "they did not recognise the figure of £1bn to £2bn".
A spokesperson for the company that runs the UK's rail infrastructure, said: "We are committed to delivering the improvements the rail network need. We strive to keep costs down to deliver improvements for passengers. We are in constant dialogue with government throughout the control period as you would expect."
The news of financial difficulties comes just weeks after City PM reported that Network Rail, a non-departmental government body, paid out £106m of fines to Britain's train operating companies in compensation for unexpected delays.
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Network Rail also must pay train operating companies for planned disruption. Although it has not released the comparable figures for 2015/16, in 2014/15 it forked out £248m for such disruption caused.
The Office for Rail and Road, whose job it is to oversee both Network Rail and the train operating companies, recently criticised Network Rail, saying that efficiency had fallen eight per cent since 2014.