The second category is operational terminals and sidings, usually on 125-year leases at peppercorn rent. Within those are some sites that could be used better and reorganised to release land on the periphery, whereas others are absolutely critical. For the former, a sophisticated approach is needed to achieve better use of the site, which would probably require some investment before the value of the disposable land could be realised. An example would be the large area of Tyne Yard.
The final category is the 105 sites bought by NR in 2014 from DB Schenker, Freightliner and GBRf, under Project Mountfield. Nearly all are tenanted for bespoke commodities such as aggregates, scrap and petrochemicals, rather than large intermodal sites. They produce a rental income of just under £20m per annum, and the original idea of NR taking them on was to increase that income by improving them. However, funds for that dried up.
Urban sites for construction materials are particularly important, to minimise lorry miles and to reduce the risk of collision with pedestrians and cyclists. Aggregate and cement companies have never been more active in investing in new terminals and wagons to meet sustained growth.
It is the tenanted estate that third parties would be most interested in buying, for income. But Simpson is anxious that proper safeguards are put in place: “There needs to be proper protection to prevent a purchaser changing a terminal’s purpose and discarding the rail connection. NR understands that. The Railways Act 1993 puts stringent criteria around disposal of freight land. My worry is that there is so much pressure on Network Rail from Government, Treasury and DfT to raise £1.8bn that there is a real risk of a fire sale being pushed through in an unthought-out way.
“Many of the asset categories NR is looking at are quite complicated. The bulk of the money is expected to come from commercial estate such as arches, but a leasehold sale doesn’t get the property off the balance sheet, and of course you can’t sell the freehold of railway arches. Under accounting rules, only a freehold sale gets it off the balance sheet. We need leasehold sales to come under the protection of the 1993 Act, which would mean a site couldn’t be disposed of without pan-industry consultation.”
Some users of terminals might well be willing to buy their sites, but if they owned the freehold without conditions there would then be nothing to stop them selling it to a party with no interest in the value of the rail link.
All these concerns point to one conclusion: careful thought is needed to maximise the potential of each site and to make sure no future rail-based needs are constrained.
Long-term strategies lie behind probably the world’s most successful mixed-use urban development around stations by a railway company - East Japan Railway is a paradigm for the way it has developed the role of the station in the urban realm, and is the subject of the following article.
