The credit support arrangements for Network Rail’s Medium Term Note programme are capped at £10 billion principal, while the unused long-term contingency buffer is capped at £4 billion principal. There is no similar limit on the financial indemnity to support Network Rail’s Debt Issuance Programme (DIP). However, the Office of Rail Regulation (ORR) has included in Network Rail’s licence a condition that limits NR’s borrowing under the DIP to 90 per cent. of its regulatory asset base (RAB). If DIP debt reaches 85 per cent. of the RAB, Network Rail have to provide ORR with an action plan of how to reduce debt below this level. The most recent public reporting of this ratio was contained in the ORR’s “Q2 06-07 Network Rail Monitor”, published on 13 November 2006, in which NR’s total debt was reported as being equal to 74.6 per cent. of the RAB. This, and a number of other controls, limit the Secretary of State’s exposure under the financial indemnity.
Network Rail’s interim financial statements for the six months ended 30 September 2006 reported the company’s net debt as £17.929 billion, compared with £16.750 billion at 30 September 2005.
Network Rail advises that the information requested on the annual interest charge on the net debt is not readily available. The hon. Member should contact Network Rail’s chief executive at the following address for a response to this part of his question.
40 Melton Street
London NW1 2EE