Network Rail unveils £1.3bn refurbishment for Waterloo

Rail chiefs unveiled a £1.3bn plan yesterday to redevelop London Waterloo station, increase capacity on services running into the terminus and introduce technology allowing peak fares to vary.

The refurbishment of the station aims to double the capacity of the concourse - dropping it down to street level and lengthen platforms to take 10-carriage, and eventually 12-carriage trains. Waterloo International will be fully integrated with the main station.

Richard Eccles, the head of route planning at Network Rail, said planners intended to introduce a "swipe card" which would allow commuters to travel at different times of day rather than the present fixed-cost season ticket. Passengers arriving at Waterloo between 8am and 9am would pay the same rates as at present, but those arriving an hour either side of the peak would pay lower rates, he said.

Mr Eccles forecast passenger growth would be about 20 per cent on the SouthWest main line over the next 10 years. If each traveller during the morning peak was persuaded to travel outside 8am to 9am on one occasion in 10, then half of this growth forecast could be accommodated without having to take steps to counter overcrowding between 8am and 9am, he said.

The new-look Waterloo could provide 10,000 more seats during the rush hour.

The proposals were published as part of Network Rail's Route Utilisation Strategy. It is understood some £800m of the cost will be borne by taxpayers and passengers, while the rest will come from companies responsible for rebuilding and developing Waterloo.

The strategy will be submitted to the Office of Rail Regulation. After 60 days, if no objection is raised, it becomes the established strategy for the route.

The South West route is operated by South West Trains, which is owned by the transport giant Stagecoach. It faces competition to retain its franchise which, from February 2007, will be expanded to include Island Line, the Isle of Wight route Stagecoach also operates. Rail operator rivals who are also bidding for South Western include Arriva, FirstGroup and the East Coast main line operator GNER.

The chief executive of Network Rail, John Armitt, said the proposed redevelopment of Waterloo station, including the International Terminal, was a cornerstone of the strategy for the route. The state-backed group is to invite expressions of interest from developers for the Waterloo project towards the end the year.

Network Rail outlined plans to begin the enhancement, within three years, of the route from Southampton to the West Coast main line via Reading to allow the passage of larger "big-box" containers preferred by freight operators.

It said: "This strategy proposes a range of measures that will make the most effective and efficient use of the capacity on the South West main line."