Real Estate Blog: Keep off the Tracks: Development near Railway Lines, Infrastructure and Stations

In the first of two articles, Michael Bray looks at issues for developers carrying out works near railway lines, and how these types of projects need careful forward planning.

Carrying out development on or near railway infrastructure requires clear forward planning to avoid unnecessary costs and delays. Early engagement with rail industry parties will help to ensure a compliant contractor procurement and ideally pass most rail asset protection risk to contractors. Increasingly intense urban regeneration coupled with a desire to make our railways more attractive, have led to a large number of significant construction projects being planned and undertaken adjacent to and above operational railway infrastructure. Developers who choose to carry out construction activities close to railway lines are required to enter into Asset Protection Agreements (APAs) or Basic Asset Protection Agreements (BAPAs) with the owners of railway infrastructure, most commonly Network Rail (soon to be Great British Railways). An APA or BAPA is a contractual agreement between a developer and the infrastructure owner, where the developer provides an indemnity for any financial losses that may occur as a result of their construction works. A BAPA may be used where works present a low risk to the network, for example works taking place next to secondary routes, simple survey work, or where trains can continue to run at all times.' Over-station' development is likely to require a development agreement with the infrastructure owner, containing asset protection arrangements, or may even be progressed as a joint venture between the developer and the infrastructure owner. Building near an operational railway line presents serious physical and financial risks to the rail network. The collapse of construction equipment for example, could result in damage to the railway or worse still, injure users. Even where no physical damage occurs, track closures (known as “possessions” if scheduled in advance) can mean that the developer (via railway infrastructure owners) could have to compensate train and freight operating companies significant sums for the disruption. In the case of unscheduled track closures, this can run into millions of pounds per day. For this reason, the standard contractor insurance required under an APA is a minimum of £155m (which is the minimum imposed by the regulator, the Office for Rail and Road).An APA will usually also give the infrastructure owner extensive rights to approve and influence the proposed design of the development, such as to prevent anything which may distract or dazzle passing train drivers.

Next week, Michael will look at developments involving the redevelopment and upgrading of railway station infrastructure.