Could a station and/or line be built/reopened entirely on private support?

[brad465]

I'm not entirely familiar with how stations that open these days get their finance, but my impression is government funding/approval is sought for a large part of the costs, particularly through the Restoring your railways scheme. But I was thinking recently if a station or old route was struggling to get financial backing from public money, could a wealthy benefactor offer to pay all the costs needed and get approval on the national rail network (if it hasn't already happened) if that benefactor really wanted? My instinct is that while they could cover the costs if they wanted, they'd still need permission from Network Rail, any TOCs involved and/or the DfT to actually make such a move happen.

 

[JonathanH]

Wasn't Warwick Parkway built based solely on private financing, albeit in a slightly different era?

 

[Ken H]

What would the income stream be for a new station. I assume you might be able to get money from a TOC if they wanted to stop there. Then there may be income from retailing. and car parking. Maybe charging for buses to serve it.
No idea if that would go anywhere near paying for the capex, though.

 

[AlastairFraser]

I'm not entirely familiar with how stations that open these days get their finance, but my impression is government funding/approval is sought for a large part of the costs, particularly through the Restoring your railways scheme. But I was thinking recently if a station or old route was struggling to get financial backing from public money, could a wealthy benefactor offer to pay all the costs needed and get approval on the national rail network (if it hasn't already happened) if that benefactor really wanted? My instinct is that while they could cover the costs if they wanted, they'd still need permission from Network Rail, any TOCs involved and/or the DfT to actually make such a move happen.

We haven't seen it succeed yet, but isn't the Windsor Link Railway proposal based on private finance?

 

[Dr Hoo]

Prestwick Airport (new station on an existing line) and Heathrow Airport (new station(s) and line) spring to mind.

 

[SynthD]

Were Warwick Parkway and Prestwick Airport only built once there was a contract for trains to serve it? The Heathrow terminals are served in part by the same company that built the track and tunnel, while at Warwick the track is still public owned.

The government would want to understand how the station will survive after the private funding disappears. I think TfL offered to fund the early years of Beam Park (a planned station in Dagenham) but the DfT still said no, I don’t remember if any real reason was given.

 

[edwin_m]

A commercial business would only invest in a line or station if they expected a commercial return. That's essentially impossible in the context of the UK passenger railway on its own. Even if some parts claim to be profitable (usually due to the odd way money moves around in the industry) that's only on the basis that most of the infrastructure was built decades or centuries ago so its capital cost has long since dropped out of the reckoning.

The only real way this would work commercially is if a rail facility enabled some other activity to make a commercial return for the investor. Airport stations can enable the airport to expand and make more money, and Japan follows the former Metropolitan Railway in allowing rail operators to make a return from property which becomes more valuable because it has a train service. Freight terminals can do something similar.

If some benefactor decided to pay all the costs of building and operating a new station without regard for a commercial return, then it would still not guarantee that a train operator would stop there. For it to be financially beneficial for the operator to stop trains there, the revenue from tickets to and from the new station would have to outweigh firstly the loss of some much longer journeys because the train is now slower, and secondly the "abstraction" effect where some people who use the new station would previously have made their journeys from some other station served by the same operator. That's just a financial effect and most train services are justified by wider socio-economic benefits rather than just profit, but those socio-economic benefits track the number of passengers in very much the same way.

 

[Bald Rick]

The key issue is the distinction between finance and funding.

To put it in simple terms, my house is financed by the building society, it is funded by my salary paying back the building society via the mortgage.

Regardless of who finances a project, someone needs to fund the financing.

So, if a ‘wealthy benefactor’ came along, and was willing to spend the cash on a new line with no expectation of being paid back, then, yes, it could be built, assuming it got planning consent. Whether trains ever ran on it would be another matter, as there’s not that many lines of route in this country that cover their own costs.

However the number of ‘wealthy benefactors’ who are willing to a) stump up the sort of cash involved in building a new railway (and the reputational issues that involves) and b) don‘t want paying back, can be counted on the thumbs of my right foot.

We haven't seen it succeed yet, but isn't the Windsor Link Railway proposal based on private finance?

Lots of dreamy proposals claim private finance backing. How that finance is funded tends to be glossed over.

The Windsor link proposal was probably the most preposterous* of those that crossed my desk (in a congested field).

* with thanks to @TT-ONR-NRN for reacquainting me with that word

 

[AlastairFraser]

Lots of dreamy proposals claim private finance backing. How that finance is funded tends to be glossed over.

Of course they do - I was aiming to prove it isn't a new concept.