THE ECONOMIC CRISIS Railway investment during the global recession a UK perspective

1. THE ECONOMIC CRISIS Railway investment during the global recession � a UK perspective Paul Plummer Before I begin, I would like to take this opportunity to thank Mr SZAFRANSKI, PKP � PLK, and the CER members for hosting this year�s HLIM. In return, and on behalf of EIM and Network Rail, I would like to return the hospitality you have shown us by inviting you to the UK for the next HLIM in June 2010.Before I begin, I would like to take this opportunity to thank Mr SZAFRANSKI, PKP � PLK, and the CER members for hosting this year�s HLIM. In return, and on behalf of EIM and Network Rail, I would like to return the hospitality you have shown us by inviting you to the UK for the next HLIM in June 2010.

2. The venue will be our leadership and development centre at Westwood, Coventry. Opened in 2005, and designed to deliver a programme of professional skills development. It is a purpose-built, residential centre, fully owned and operated by Network Rail staff, and equipped with all the facilities needed not just for learning, but to cater to the needs of those staying for longer periods of study. The work at Westwood is about changing hearts and minds and becoming world class in leadership and management skills. The venue will be our leadership and development centre at Westwood, Coventry. Opened in 2005, and designed to deliver a programme of professional skills development. It is a purpose-built, residential centre, fully owned and operated by Network Rail staff, and equipped with all the facilities needed not just for learning, but to cater to the needs of those staying for longer periods of study. The work at Westwood is about changing hearts and minds and becoming world class in leadership and management skills.

3. An invitation Westwood is located next to the University of Warwick, with its world-renown business school and manufacturing studies centre � with whom we collaborate to design, deliver and accredit a range of training courses. But just as importantly, Westwood provides an environment away from the day-to-day pressures of work that promotes creativity and strategic planning. Something we hope to be able to let you experience. With 165 ensuite bedrooms, we are able to offer quality accommodations to all those who wish to stay on site for the HLIM, courtesy of Network Rail.Westwood is located next to the University of Warwick, with its world-renown business school and manufacturing studies centre � with whom we collaborate to design, deliver and accredit a range of training courses. But just as importantly, Westwood provides an environment away from the day-to-day pressures of work that promotes creativity and strategic planning. Something we hope to be able to let you experience. With 165 ensuite bedrooms, we are able to offer quality accommodations to all those who wish to stay on site for the HLIM, courtesy of Network Rail.

4. The next HLIM 2 & 3 June, 2010 Hosted by Network Rail Venue will be our training and development centre at Westwood, Coventry Connections via London (West Coast Main Line) or Birmingham International Airport The date of the meeting will be 3 June, with a evening reception, and no-doubt EIM and CER meetings during the day of June 2. The Westwood Training Centre is on the edge of Coventry, which can be easily accessed from Birmingham and the Birmingham International Airport, or from London on the West Coast Main Line. Full details will be sent to you all in due course by the two associations. The date of the meeting will be 3 June, with a evening reception, and no-doubt EIM and CER meetings during the day of June 2. The Westwood Training Centre is on the edge of Coventry, which can be easily accessed from Birmingham and the Birmingham International Airport, or from London on the West Coast Main Line. Full details will be sent to you all in due course by the two associations.

5. THE ECONOMIC CRISIS Railway investment during the global recession � a UK perspective Paul Plummer My modest theme, as you will have seen, is: The ECONOMIC CRISIS  Specifically, I intend to discuss �railway investment during the global recession� giving you a UK perspective on the current economic climate.My modest theme, as you will have seen, is: The ECONOMIC CRISIS

6. Economic Crisis The benefits of long-term planning and investment cycles Railways as vehicles for economic stimulus � Adapting in the short term and transforming the business Helping industry partners to adapt in the short term Sustainability Planning for the long term I intend to touch on 5 general themes; as you can see here. The benefits of long-term planning and investment cycles Railways as vehicles for economic stimulus � Adapting in the short term and the transformation of our business Helping industry partners to adapt in the short term And finally, our approach to planning for the long term I intend to touch on 5 general themes; as you can see here. The benefits of long-term planning and investment cycles Railways as vehicles for economic stimulus � Adapting in the short term and the transformation of our business Helping industry partners to adapt in the short term And finally, our approach to planning for the long term

7. The recession in Europe CER High Level Freight Meeting Central and Eastern Europe � down 34% Western Europe � down 36% Nearly 20% reduction predicted in 2009 Without a doubt, the current economic environment has certainly made for difficult times, for all parts of our industry. Depending on which sector of the industry any company is in, be it; freight, track-works, passenger operations, supply chain, or construction � each experience will be different. For example � let us look at freight: CER�s High Level Freight meeting produced a declaration in April assessing the how the economic crisis affected rail freight. It found that in December 2008, freight transport in Central and Eastern Europe had declined 22% year-on-year. This worsened to 34% in January of this year. And in 2009, European Rail Freight companies are predicting a further decline of close to 20%.Without a doubt, the current economic environment has certainly made for difficult times, for all parts of our industry. Depending on which sector of the industry any company is in, be it; freight, track-works, passenger operations, supply chain, or construction � each experience will be different. For example � let us look at freight: CER�s High Level Freight meeting produced a declaration in April assessing the how the economic crisis affected rail freight. It found that in December 2008, freight transport in Central and Eastern Europe had declined 22% year-on-year. This worsened to 34% in January of this year. And in 2009, European Rail Freight companies are predicting a further decline of close to 20%.

8. The recession in the UK So how does this compare to the UK? In the UK, the rail freight market is not only highly competitive, but it mostly exists on a strictly commercial basis. If the profits disappear, freight ceases to run on the network. Network Rail tracks the year-on-year trends for all operators and the following represents the changes as of March measured by �gross tonne miles� (i.e. net cargo tonnes times the distance travelled); At first appearances, this may seem not too unhealthy considering the changes seen in other markets. Container movements through UK ports have fallen by about 5% so the above rail figures mean that we have gained market share against road. Construction has only dropped its volume a little � though this would not be so were it not for rail supplying the Olympics site at Stratford in London - an interesting example of how a government investment is supporting a key sector of the economy. However, the iron ore result shows the start of a manufacturing downturn, and car imports reflect a clear loss of consumer confidence. Freight operators have already advised us of reductions they are making in the number of construction, container and steel trains further into 2009. So our projections are in line with other European ones.So how does this compare to the UK? In the UK, the rail freight market is not only highly competitive, but it mostly exists on a strictly commercial basis. If the profits disappear, freight ceases to run on the network. Network Rail tracks the year-on-year trends for all operators and the following represents the changes as of March measured by �gross tonne miles� (i.e. net cargo tonnes times the distance travelled); At first appearances, this may seem not too unhealthy considering the changes seen in other markets. Container movements through UK ports have fallen by about 5% so the above rail figures mean that we have gained market share against road. Construction has only dropped its volume a little � though this would not be so were it not for rail supplying the Olympics site at Stratford in London - an interesting example of how a government investment is supporting a key sector of the economy. However, the iron ore result shows the start of a manufacturing downturn, and car imports reflect a clear loss of consumer confidence. Freight operators have already advised us of reductions they are making in the number of construction, container and steel trains further into 2009. So our projections are in line with other European ones.

9. Impact on passenger operations What about passengers? Well there is less transparent information, both in Europe and in the UK on the passenger market. However, in the UK some patterns are already emerging. While we have not seen passenger numbers go into reverse in the same way that freight has, growth has certainly been hit. And revenue appears to be more responsive to external conditions than passenger volume � perhaps because of pricing incentives being used by operators to support businesses, or simply more price sensitive decisions being taken by passengers. Three of our biggest operating groups are either now in receipt of, or reported to be in negotiations for, support from government under the mechanisms in their contracts to protect them from passenger revenues below those predicted at the time the contracts were awarded. What about passengers? Well there is less transparent information, both in Europe and in the UK on the passenger market. However, in the UK some patterns are already emerging. While we have not seen passenger numbers go into reverse in the same way that freight has, growth has certainly been hit. And revenue appears to be more responsive to external conditions than passenger volume � perhaps because of pricing incentives being used by operators to support businesses, or simply more price sensitive decisions being taken by passengers. Three of our biggest operating groups are either now in receipt of, or reported to be in negotiations for, support from government under the mechanisms in their contracts to protect them from passenger revenues below those predicted at the time the contracts were awarded.

10. Additional Infrastructure France Germany Belgium UK Romania Spain Finland Italy +� UNIFE�s report found that in some countries we are benefiting from governments who see investment in rail as one of the most effective tools to stimulate their economies. These benefits included new rail projects being launched, large orders being placed for rolling stock and equipment, and major, national, fiscal stimulus packages that will benefit rail in the near future. In France, we have seen President Sarkozy reaffirm the importance he attaches to infrastructure, and specifically railways, for reviving economic activity and employment. Hubert has already highlighted some of the investments being made here. In Germany, DB has welcomed additional government investment, declaring that: �we have decided to invest into the future.� In Belgium, not only are major infrastructure schemes such as the Brussels express network underway, but Wallonia is planning an extra investment of 600m Euros in public transport projects. In the UK we are moving forward with initiatives to electrify more of our network, and plans to develop new high speed lines � of which more in a moment. UNIFE also report seeing projects being announced or accelerated in Romania, Spain, Finland, and Italy. Elsewhere, national recovery plans were either still being formulated � as was the case in Poland and The Netherlands. But in many other countries rail was not being used to deliver new and additional economic stimuli. UNIFE�s report found that in some countries we are benefiting from governments who see investment in rail as one of the most effective tools to stimulate their economies. These benefits included new rail projects being launched, large orders being placed for rolling stock and equipment, and major, national, fiscal stimulus packages that will benefit rail in the near future. In France, we have seen President Sarkozy reaffirm the importance he attaches to infrastructure, and specifically railways, for reviving economic activity and employment. Hubert has already highlighted some of the investments being made here. In Germany, DB has welcomed additional government investment, declaring that: �we have decided to invest into the future.� In Belgium, not only are major infrastructure schemes such as the Brussels express network underway, but Wallonia is planning an extra investment of 600m Euros in public transport projects. In the UK we are moving forward with initiatives to electrify more of our network, and plans to develop new high speed lines � of which more in a moment. UNIFE also report seeing projects being announced or accelerated in Romania, Spain, Finland, and Italy. Elsewhere, national recovery plans were either still being formulated � as was the case in Poland and The Netherlands. But in many other countries rail was not being used to deliver new and additional economic stimuli.

11. The UK multi-annual contract So what does the picture look like, for me, at home? Network Rail has just entered a new, 5-year, multi-annual contract. Our fourth. This gives us a unique perspective on the planning cycles for multi-annual contracts; the effects of the economic downturn on the relatively stable environment that these contracts bring, and test our ability to continue to plan for the long term. In the UK, the negotiations for our 5 year Multi-Annual Contract, which started in April this year, eclipsed the global recession. Our discussions began in 2007, well before the size of the down-turn would become known. Network Rail will be investing �35 billion to maintain, renew and enhance the UK�s railway until 2014. Our plans include �11.5 billion will be invested in renewals to replace older parts of the network (rail, signalling, bridges). A further �9.2 billion will be invested in day-to-day maintenance and the costs of operating and running the network safely over the period. A further �2.2 billion on non-controllable operating expenditure. And, almost �12 billion for enhancement projects designed to increase capacity and capability to allow more trains to run, and relieve overcrowding by lengthening platforms. So what does the picture look like, for me, at home? Network Rail has just entered a new, 5-year, multi-annual contract. Our fourth. This gives us a unique perspective on the planning cycles for multi-annual contracts; the effects of the economic downturn on the relatively stable environment that these contracts bring, and test our ability to continue to plan for the long term. In the UK, the negotiations for our 5 year Multi-Annual Contract, which started in April this year, eclipsed the global recession. Our discussions began in 2007, well before the size of the down-turn would become known. Network Rail will be investing �35 billion to maintain, renew and enhance the UK�s railway until 2014. Our plans include �11.5 billion will be invested in renewals to replace older parts of the network (rail, signalling, bridges). A further �9.2 billion will be invested in day-to-day maintenance and the costs of operating and running the network safely over the period. A further �2.2 billion on non-controllable operating expenditure. And, almost �12 billion for enhancement projects designed to increase capacity and capability to allow more trains to run, and relieve overcrowding by lengthening platforms.

12. Additional investment In total, only around EUR 4bn has so far been made available for rail transport projects across Europe through the various national stimulus programs. This amount is small, when compared to the support being given to the car industry at both national and EU level. The 4bn Euros also needs to be considered against the growing difficulty of access to private financing that might otherwise have triggered postponements or cancellations to many of these schemes. These investments may therefore simply be guaranteeing the continuation of existing projects � rather than the investment creating wholly new activities.In total, only around EUR 4bn has so far been made available for rail transport projects across Europe through the various national stimulus programs. This amount is small, when compared to the support being given to the car industry at both national and EU level. The 4bn Euros also needs to be considered against the growing difficulty of access to private financing that might otherwise have triggered postponements or cancellations to many of these schemes. These investments may therefore simply be guaranteeing the continuation of existing projects � rather than the investment creating wholly new activities.

13. Stability of investment The funding settlement we have also means that the railway is a key source of economic activity during the current downturn. We have a certainty on our income and, therefore, a level of stability which many other companies in our industry do not have in the current economic climate. We believe this gives us a responsibility to look to see how else we can help our industry. Already within our Multi-Annual Contract, Network Rail already has funding for a number of high profile schemes such as the Thameslink Programme � a major upgrade of a north-south cross London route extending to the surrounding regions. We are already beginning the redevelopment of Reading and Birmingham New Street stations � two of the largest train and passenger bottle-necks on the UK�s network. And in Scotland, we are building a new airport link to Glasgow Airport, and a link between Airdrie and Bathgate in Scotland.The funding settlement we have also means that the railway is a key source of economic activity during the current downturn. We have a certainty on our income and, therefore, a level of stability which many other companies in our industry do not have in the current economic climate. We believe this gives us a responsibility to look to see how else we can help our industry. Already within our Multi-Annual Contract, Network Rail already has funding for a number of high profile schemes such as the Thameslink Programme � a major upgrade of a north-south cross London route extending to the surrounding regions. We are already beginning the redevelopment of Reading and Birmingham New Street stations � two of the largest train and passenger bottle-necks on the UK�s network. And in Scotland, we are building a new airport link to Glasgow Airport, and a link between Airdrie and Bathgate in Scotland.

14. TEN-T We are also looking for ways to be able to deliver additional economic activity for the economy, and have welcomed the initiatives seen at EU level. As you will know, the Commission responded to the Economic downturn with the release of 500 million Euros from the TEN-T budget as part of the European Economic Recovery Programme. Network Rail has bid for a share of this fund, as I�m sure many of you have. And, as mentioned above, our government has moved to provide political and/or financial support to guarantee the progress of key infrastructure initiatives � such as the planning for a new high-speed line, and the start of works on the London Crossrail tunnel.We are also looking for ways to be able to deliver additional economic activity for the economy, and have welcomed the initiatives seen at EU level. As you will know, the Commission responded to the Economic downturn with the release of 500 million Euros from the TEN-T budget as part of the European Economic Recovery Programme. Network Rail has bid for a share of this fund, as I�m sure many of you have. And, as mentioned above, our government has moved to provide political and/or financial support to guarantee the progress of key infrastructure initiatives � such as the planning for a new high-speed line, and the start of works on the London Crossrail tunnel.

15. Adapting to conditions Funding of much of the UK railway is done in partnership with public and private investors. Where we are involved in projects dependent on the involvement of private sector investment, we have had to adapt to market conditions and adjust the timing of projects. However, we along with many of our partners, have always adopted the view that rail infrastructure and regeneration projects produce significant long term benefits. We are therefore continuing to progress key projects, making the best use of existing resources, in preparation for the economic upturn. We are also aware of the need to support our funding partners � especially those from the private sector - through further efficiencies, new ways of working together, and long-term planning. And to help us ensure publicly supported funding partnerships, Local Government in the UK still needs to be encouraged to support regeneration and transport projects.Funding of much of the UK railway is done in partnership with public and private investors. Where we are involved in projects dependent on the involvement of private sector investment, we have had to adapt to market conditions and adjust the timing of projects. However, we along with many of our partners, have always adopted the view that rail infrastructure and regeneration projects produce significant long term benefits. We are therefore continuing to progress key projects, making the best use of existing resources, in preparation for the economic upturn. We are also aware of the need to support our funding partners � especially those from the private sector - through further efficiencies, new ways of working together, and long-term planning. And to help us ensure publicly supported funding partnerships, Local Government in the UK still needs to be encouraged to support regeneration and transport projects.

16. Transformation Looking ahead however, we cannot expect this additional money to flow forever. High levels of public support may not be maintained for very long. There will come a time when today�s public borrowing will need to be paid back, and public expenditure will be cut. We therefore need to take this opportunity to invest in delivering long-term savings. Network Rail has spent much of the past five years making short term, often expensive, investments in order to obtain long term savings. Such a whole-life cost approach has seen us invest in high-output plant and equipment, create our own training centres, and redesign processes to move towards modular engineering. We will continue to do this in order to drive down future costs. And while the unit costs of the railway must continue to be reduced from today�s levels, we are aware that the expectations of passengers and those who want to move goods by rail, in terms of service quality, will continue to increase. The challenge is therefore to drive further efficiencies, and do more with the same resources. In fact, without a saving of �4bn over 5 years we will not be able to meet the agreed outputs of our multi annual contract.Looking ahead however, we cannot expect this additional money to flow forever. High levels of public support may not be maintained for very long. There will come a time when today�s public borrowing will need to be paid back, and public expenditure will be cut. We therefore need to take this opportunity to invest in delivering long-term savings. Network Rail has spent much of the past five years making short term, often expensive, investments in order to obtain long term savings. Such a whole-life cost approach has seen us invest in high-output plant and equipment, create our own training centres, and redesign processes to move towards modular engineering. We will continue to do this in order to drive down future costs. And while the unit costs of the railway must continue to be reduced from today�s levels, we are aware that the expectations of passengers and those who want to move goods by rail, in terms of service quality, will continue to increase. The challenge is therefore to drive further efficiencies, and do more with the same resources. In fact, without a saving of �4bn over 5 years we will not be able to meet the agreed outputs of our multi annual contract.

17. Passenger Operations Firstly, Passengers: We are working more closely with the passenger operators through more integrated working and joint strategies. We already have individual joint improvement plans with each of our customers to help plan improvements in service � and these are more important than ever. We are constantly looking for opportunities to help them increase the competitiveness of their businesses. At stations, we are about to conclude an agreement to move station maintenance from the operators, to Network Rail on a fixed cost contract that will keep prices at a below-inflation level of change. We are looking at opportunities to reduce the level of man-marking, where we shadow each other�s activity for little additional benefit � the costs of which are eventually all born, in part, by our customers. And where we can we are working with our customers to leverage-in public funds to improve stations - for example, in Wales, where we have created a forum to discuss enhancement opportunities and joint strategies to secure funding in partnership with the Welsh train operator and the Welsh Assembly Government. Firstly, Passengers: We are working more closely with the passenger operators through more integrated working and joint strategies. We already have individual joint improvement plans with each of our customers to help plan improvements in service � and these are more important than ever. We are constantly looking for opportunities to help them increase the competitiveness of their businesses. At stations, we are about to conclude an agreement to move station maintenance from the operators, to Network Rail on a fixed cost contract that will keep prices at a below-inflation level of change. We are looking at opportunities to reduce the level of man-marking, where we shadow each other�s activity for little additional benefit � the costs of which are eventually all born, in part, by our customers. And where we can we are working with our customers to leverage-in public funds to improve stations - for example, in Wales, where we have created a forum to discuss enhancement opportunities and joint strategies to secure funding in partnership with the Welsh train operator and the Welsh Assembly Government.

18. Working with freight operators Performance and time-keeping Better route availability Train size Better train plans Network speed increases Iimprovements to the capability and capacity of the network Sale of non-operational assets We are therefore looking at measures to improve: performance and time-keeping: - Network Rail draws together cross-industry working groups to improve current time-keeping at major centres of freight activity. We provide specialist (�Six-sigma�) process experts to facilitate this at no charge to our customers. Hundreds of thousands of industry delay minutes have been saved as a result � both for freight and other train operators. better route availability for newer locomotives: train size: - The UK network�s �Vehicle Change� process allows us to work with train operators to trial increased train sizes. Once it has been proven that the longer, heavier trains can operate without adverse impact on other network users the larger train sizes become established. The trials have traditionally been at the request of the operators, but Network Rail is increasingly identifying opportunities and offering them to customers. better train plans to save rolling stock resources: network speed increases: - in the past two years, thanks to an assessment of every bridge on the network, we have lifted 130 historic speed restrictions for heavy axle-weight vehicles over bridges. And perhaps most importantly for the future we have worked very closely with the freight community to identify and implement improvements to the capability and capacity of the network. Industry consultation, business case development and scheme delivery have been strengthened. �500 hundred million worth of freight-specific enhancements are now underway across the network � a greater programme than at any time since the 1950�s The Freight Operators are valued customers and are going through tough times. But freight will recover strongly in time. The long term trends, environmental and economic, are still good; there are huge network and private investment taking place in freight projects which will sustain these advantages. However, in the short term we will do everything we can to help our customers weather the tough times. Focus on service � keep the trains running on time � and help our customers� cash flow.We are therefore looking at measures to improve: performance and time-keeping: - Network Rail draws together cross-industry working groups to improve current time-keeping at major centres of freight activity. We provide specialist (�Six-sigma�) process experts to facilitate this at no charge to our customers. Hundreds of thousands of industry delay minutes have been saved as a result � both for freight and other train operators. better route availability for newer locomotives: train size: - The UK network�s �Vehicle Change� process allows us to work with train operators to trial increased train sizes. Once it has been proven that the longer, heavier trains can operate without adverse impact on other network users the larger train sizes become established. The trials have traditionally been at the request of the operators, but Network Rail is increasingly identifying opportunities and offering them to customers. better train plans to save rolling stock resources: network speed increases: - in the past two years, thanks to an assessment of every bridge on the network, we have lifted 130 historic speed restrictions for heavy axle-weight vehicles over bridges. And perhaps most importantly for the future we have worked very closely with the freight community to identify and implement improvements to the capability and capacity of the network. Industry consultation, business case development and scheme delivery have been strengthened. �500 hundred million worth of freight-specific enhancements are now underway across the network � a greater programme than at any time since the 1950�s The Freight Operators are valued customers and are going through tough times. But freight will recover strongly in time. The long term trends, environmental and economic, are still good; there are huge network and private investment taking place in freight projects which will sustain these advantages. However, in the short term we will do everything we can to help our customers weather the tough times. Focus on service � keep the trains running on time � and help our customers� cash flow.

19. Working with suppliers Lock down the work-bank New contracts Standardisation Simplify our processes The same challenge also flows in the opposite direction down our supply chain. If anything, the economic challenges here are tougher, as much of the rail industry is supported and supplied by small often specialist businesses who have little protection from the financial storm. These range from the enterprising start-up companies, through specialist providers, to the traditional railway family businesses. Reducing their risks from working with us, and joint business planning are both key to providing them with a more stable business environment, and provide us with opportunities to deliver greater efficiencies. So we are making a number of changes to help our suppliers. Lock down the work-bank: We are attempting to finalise the future workbank and complete designs early � this will help the market lock-down work volumes and better plan their business needs. This commitment down through the supply chain can only be delivered by more robust designs completed early � in our case up to 1 year prior to construction. New contracts: We are looking at changing the way we carry out design contracts, specifying resource utilisation, and not just focussing on lowest cost of delivering designs. Standardisation: We are looking at standardising/modularising our products/designs which should enable simplification of plant, labour and material requirements for projects. Simplify our processes: And finally, Network Rail is running a project to improve the efficiency of project governance. This will simplify our internal processes which should mean that the level of bureaucracy that suppliers have to go through in dealing with us will be reduced. The same challenge also flows in the opposite direction down our supply chain. If anything, the economic challenges here are tougher, as much of the rail industry is supported and supplied by small often specialist businesses who have little protection from the financial storm. These range from the enterprising start-up companies, through specialist providers, to the traditional railway family businesses. Reducing their risks from working with us, and joint business planning are both key to providing them with a more stable business environment, and provide us with opportunities to deliver greater efficiencies. So we are making a number of changes to help our suppliers. Lock down the work-bank: We are attempting to finalise the future workbank and complete designs early � this will help the market lock-down work volumes and better plan their business needs. This commitment down through the supply chain can only be delivered by more robust designs completed early � in our case up to 1 year prior to construction. New contracts: We are looking at changing the way we carry out design contracts, specifying resource utilisation, and not just focussing on lowest cost of delivering designs. Standardisation: We are looking at standardising/modularising our products/designs which should enable simplification of plant, labour and material requirements for projects. Simplify our processes: And finally, Network Rail is running a project to improve the efficiency of project governance. This will simplify our internal processes which should mean that the level of bureaucracy that suppliers have to go through in dealing with us will be reduced.

20. The future We must do everything we can to help our customers weather the tough times. However, the recession will not last for ever and passenger numbers and freight volumes will recover strongly in time. Therefore, looking beyond the current recession and CP4, Network Rail is also working closely with these customers and industry partners on developing a long term vision for the railway. Despite the current short term downturn, the drivers behind growth in rail in recent years will continue - rising wealth and international trade, the provision of higher quality and faster train services, increasing urbanisation and development of city centres, both in London and the regions; and rising road congestion and climate change. Over the next few decades major changes are likely to be needed to the railway.� Our roads and skies will become increasingly congested, and it is entirely possible demand for rail will double over that time, and possibly triple further into the future.� The UK is committed to reducing its carbon emissions by 80% by 2050, which favours rail over road and air travel, though it will require our industry to become even more energy efficient itself.� We must do everything we can to help our customers weather the tough times. However, the recession will not last for ever and passenger numbers and freight volumes will recover strongly in time. Therefore, looking beyond the current recession and CP4, Network Rail is also working closely with these customers and industry partners on developing a long term vision for the railway. Despite the current short term downturn, the drivers behind growth in rail in recent years will continue - rising wealth and international trade, the provision of higher quality and faster train services, increasing urbanisation and development of city centres, both in London and the regions; and rising road congestion and climate change. Over the next few decades major changes are likely to be needed to the railway.� Our roads and skies will become increasingly congested, and it is entirely possible demand for rail will double over that time, and possibly triple further into the future.� The UK is committed to reducing its carbon emissions by 80% by 2050, which favours rail over road and air travel, though it will require our industry to become even more energy efficient itself.�

21. Summary The recession has shown the importance of multi-annual contracts. It has demonstrated the role we can all play as engines for economic activity in our home countries. But it has also served as a reminder that we are services companies that our customers rely upon to keep trading in increasingly competitive times. Just as our customers are experiencing tough times � this does feed through to us. But we also have the benefit of a level of confidence in future income and work. In the UK, this provides strength not just for Network Rail: it also allows us to be a source for stability within the railway industry in the UK. This gives us an opportunity � to drive forward the development, and the transformation of the rail industry in the UK. And it has provided us with an example to provide leadership and support to other sectors in our industry. It is an opportunity we cannot afford to waste. If we get it right, we believe it will help secure our position as the strategic leader of the industry in the UK, and it will help build stronger partnerships with our customers, and our suppliers, as we help grow their businesses into the future. We need to operate our networks to deliver a better service and become more responsive to the needs of our customers, passengers and other industry partners during this downturn. This means striving for greater reliability, improved performance and a seven day railway. It means providing leadership. It means providing decisions over what sort of railway we are developing for the future. It means benchmarking ourselves against the rest of the industry to learn what we can from others � something we intend to do more of in the years ahead, with many of you if we have the opportunity. And it means sharing what we can with all of you. I hope this has made some contribution to this goal, and I look forward to continuing the discussions with you all today, during the course of the year, and next June at Network Rail�s leadership centre in the UK.The recession has shown the importance of multi-annual contracts. It has demonstrated the role we can all play as engines for economic activity in our home countries. But it has also served as a reminder that we are services companies that our customers rely upon to keep trading in increasingly competitive times. Just as our customers are experiencing tough times � this does feed through to us. But we also have the benefit of a level of confidence in future income and work. In the UK, this provides strength not just for Network Rail: it also allows us to be a source for stability within the railway industry in the UK. This gives us an opportunity � to drive forward the development, and the transformation of the rail industry in the UK. And it has provided us with an example to provide leadership and support to other sectors in our industry. It is an opportunity we cannot afford to waste. If we get it right, we believe it will help secure our position as the strategic leader of the industry in the UK, and it will help build stronger partnerships with our customers, and our suppliers, as we help grow their businesses into the future. We need to operate our networks to deliver a better service and become more responsive to the needs of our customers, passengers and other industry partners during this downturn. This means striving for greater reliability, improved performance and a seven day railway. It means providing leadership. It means providing decisions over what sort of railway we are developing for the future. It means benchmarking ourselves against the rest of the industry to learn what we can from others � something we intend to do more of in the years ahead, with many of you if we have the opportunity. And it means sharing what we can with all of you. I hope this has made some contribution to this goal, and I look forward to continuing the discussions with you all today, during the course of the year, and next June at Network Rail�s leadership centre in the UK.

22. Delivering more � for less

23. Railway investment during the global recession � a UK perspective Paul Plummer Before I begin, I would like to take this opportunity to thank Mr SZAFRANSKI, PKP � PLK, and the CER members for hosting this year�s HLIM. In return, and on behalf of EIM and Network Rail, I would like to return the hospitality you have shown us by inviting you to the UK for the next HLIM in June 2010.Before I begin, I would like to take this opportunity to thank Mr SZAFRANSKI, PKP � PLK, and the CER members for hosting this year�s HLIM. In return, and on behalf of EIM and Network Rail, I would like to return the hospitality you have shown us by inviting you to the UK for the next HLIM in June 2010.