A view of Marylebone Station in London, Monday, Jan. 21, 2008.  The German rail operator Deutsche Bahn AG (DB) has announced the acquisition of Laing Rail, owners of Chiltern Railways and joint owners of London Overground Rail Operations Ltd and Wrexham, Shropshire and Marylebone Railway Ltd.  (AP Photo/Akira Suemori)

In a rare piece of good news for Network Rail, the troubled operator of Britain’s rail infrastructure will on Monday open a £320m extension of a train line to provide a direct service between London Marylebone station and the outskirts of Oxford on time and to budget.

The alternative route is expected to provide an additional 250,000 return journeys to the capital annually. Great Western runs the service between another London station, Paddington, and central Oxford.

The new route has been financed with £130m of investment from Chiltern Railways, part of Arriva, the division of Deutsche Bahn responsible for regional passenger transport outside of Germany.

It has helped pay for two new stations, which will also open on Monday at Oxford Parkway, north of the city, and Bicester Village, the discount fashion retail park.

The capital Network Rail provided for the upgrade is to be recovered through track access charges over the next 30 years.

The German company has a uniquely long 20-year contract to run the new service, which Network Rail says will encourage investment in the rail network. Most rail franchises last seven years.

The line opens as Network Rail faces criticism for cost overruns and mismanagement of a £38.5bn upgrade plan, billed by the government as its biggest investment in the railways since Victorian times.

Network Rail’s troubles were compounded last week when MPs heard that the cost of electrifying the Great Western line has tripled from the original estimate to as much as £2.8bn, putting a swath of other improvement projects in doubt.

Mark Carne, Network Rail’s chief executive, said the cost of electrifying the Great Western main line would reach between £2.5bn and £2.8bn, up from £1.6bn a year ago. At the start of 2013, the bill for upgrading the line, which runs from London towards Wales, was expected to be £874m.

The news came days after it emerged that more than a third of Network Rail’s targets relating to big upgrade programmes had been missed, with the average delay exceeding six months.

Mr Carne told the public accounts committee that there would “undoubtedly” be more “bad news” in a forthcoming review by Sir Peter Hendy of what Network Rail will be able to deliver from its promised modernisation programme.

The cost estimates had been “fundamentally” wrong, he said. “Because we are no longer able to raise additional debt, something has to give.”

Network Rail’s troubles came to a head earlier this year when the government shelved significant upgrades to rail lines in the Midlands and the north of England, blaming the infrastructure owner’s “unacceptable performance”.

Electrification of the Great Western line is continuing but while work on the Transpennine and Midland lines will now go ahead, neither will be completed until at least 2022.

Tony Travers, professor at the Department of Government at the London School of Economics, said the budget inflation was “shocking evidence” of underlying problems at Network Rail”. “This should terrify the Treasury if they look at even the starting cost of High Speed 2 [the proposed new £50bn railway line],” he added.

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