Bonuses of £55m at Network Rail

About half of Network Rail's income comes from government

Rail infrastructure firm Network Rail has said staff will receive total bonuses of £55m, as it announced annual pre-tax profit of £1.6bn for 2007-08.

Chief executive Iain Coucher will get a annual bonus of £305,581 and, under a separate three-year incentive plan, will receive a further £205,000.

Hailing a good year for staff and the public, the firm said more than 90% of trains were on time, while delays from works were at the lowest for a decade.

But the firm was fined £14m after engineering work over-ran during the Christmas and New Year period.

It was the biggest financial penalty ever imposed by the Office of Rail Regulation (ORR).

Incentives

On Friday Network Rail confirmed its three top directors were each receiving performance-related annual bonuses of more than £200,000.

Also, under the separate incentive plan, the top trio are also getting bonuses of more than £153,000, with Mr Coucher getting £205,000.

Ex-chief executive John Armitt will get a £178,000 bonus for being for being at the helm for part of the past three years.

And all staff members will get an annual bonus of at least £871.

'Lessons learned'

The results came a day after the ORR published draft proposals requiring Network Rail to improve its efficiency and punctuality in 2009-14 - but with £3bn less than the firm had asked for.

The infrastructure company, which revealed post-tax profit of £1.2bn, will also be asked to do less weekend engineering work.

The delays over the festive period occurred after repairs at Rugby over-ran by four days, severing the West Coast Main Line, and causing massive disruption.

Sir Ian McAllister, Chairman Network Rail on the profits

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

"Lessons have been learnt following the engineering overrun," said chairman Sir Ian McAllister.

"Changes have been made to make the planning and execution of such big improvement schemes more robust."

It said delays which could be attributed to the firm were reduced by one million minutes over the year - the lowest level for a decade.

Government income

Network Rail now controls the nation's railway infrastructure, including tracks, signals, most stations, tunnels and level crossings.

It has no shareholders but is run on a commercial basis as a "not-for-dividend" company which means that all of its profits are invested in the railway network.

It is the successor to Railtrack, a private company which was placed in administration in October 2001 amid growing concerns over its safety record and heavy losses.

Private sector ownership of those assets had been judged a failure so the government set up a new structure that gave it much more control.

About half of Network Rail's income comes directly from the government.

Most of the rest comes from rail operating companies which pay fees to use the tracks. But these fees are themselves set by the rail regulator at the behest of the government.

Additional income comes from its properties, including leasing space to shops at stations.