UK - Record £14m fine for rail company

[John Ashworth]

Record £14m fine for rail company

Network Rail has been fined a record £14m by the Office of Rail Regulation, after engineering work over-ran during the Christmas and New Year period.

But the company says that without further delays, it risks not meeting a December deadline for work to the West Coast Main Line at Rugby.

Passengers now face extra disruption through the summer, as lines are closed in order to complete the work.

Critics say the fine is "pointless" as it will end up being paid by taxpayers.

Network Rail's chief executive Ian Coucher said his company had now put "military-style" command posts in place, and he pledged that the delays suffered by passengers over the New Year would not be repeated.

Confusion

He said: "We will make changes in the way we plan and manage future work on the railways."

Network Rail will pay its £14m fine to Department for Transport - but guidelines state that the DfT must pass the money straight to the Treasury, rather than spending it on rail improvements.

Liberal Democrat transport spokesman Norman Baker said: "All the fine means is that Network Rail will have £14m less to invest in railways, and the Chancellor £14m more in his coffers."

He said that because Network Rail had no shareholders, the Office of Rail Regulation (ORR) was effectively penalising taxpayers who funded a publicly-owned company.

The watchdog body Passenger Focus accused the regulator of "fining passengers twice".

Rail union leader Gerry Doherty called for senior directors to lose their annual bonuses rather than what he called "a pointless recycling of taxpayers' money."

The fine relates mainly to major engineering work at Rugby in late December and January, which over-ran by four days, severing the West Coast Main Line and causing massive disruption.

Mr Coucher conceded at the time that the work had been delayed because specialist workmen failed to turn up for work.

Disruption

There was more disruption in London when late-running work at Liverpool Street station forced it to close as people tried to return to work after the Christmas break.

Thousands of passengers were affected.

The ORR said the fine - the largest ever levelled on a rail company - was to reflect "the serious nature of this breach, the impact it had already had on passengers and rail freight users and the need for the company to take urgent action to improve its approach".

ORR chief executive Chris Bolt said that, while his office was powerless to reduce the size of Network Rail bosses' bonuses, the regulator could press for a possible tightening up of the procedures by which bonuses were awarded.

The ORR has also ordered Network Rail to provide a clear plan of how it intends to complete the upgrade of the West Coast Main Line.

Mr Coucher admitted on Thursday that the Rugby project was still two weeks behind schedule.

But he added: "We have already made changes and the action we have taken since the New Year to bring in more specialist engineers and to create military-style command posts will further improve our delivery record and enable us to build a bigger, better railway that passengers and freight users deserve."

Extra closures

The company already planned line closures over Easter and bank holidays, and has now pinpointed 13 extra weekends during the summer, when passengers will be forced to find alternative routes.

The lines will be closed between Saturday lunchtime and Sunday lunchtime.

The operations of 12 train companies depend on the project. They include Virgin, which is planning to launch a major marketing campaign in November to sell faster journey times on the modernised line.

The ORR fine came on the same day that the chairman of Network Rail, Sir Ian McAllister, was knighted by the Prince of Wales for "services to transport."

At the time of the disruption in January, Sir Ian declined to come into work because he said he would "only get in the way."

NETWORK RAIL
20,000 miles of track
1,000 signal boxes
40,000 bridges and tunnels
Operates 18 major stations
Carries 3m passengers per day
32,000 employees

REGULATOR REPORT
Network Rail (NR) "failed to ensure good site management at Rugby"
NR "failed to conduct effective assessment of risks at Liverpool St station"
NR "failed to conduct effective risk assessment at Shields Junction"


Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/1/hi/uk/7267658.stm
Published: 2008/02/28 13:57:03 GMT

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