Page last updated at 12:35 GMT, Friday, 9 May 2008 13:35 UK

Network Rail must pay record fine

Rail passengers await coaches at Rugby
Work was not completed on the West Coast Mainline at Rugby

Network Rail must pay a record 14m fine for overrunning engineering work, despite a plea to have it set aside.

The company had asked the Office of Rail Regulation (ORR) to allow it spend 14m on track improvements instead.

But the ORR said Network Rail (NR) was guilty of a "serious and continuing breach of its licence" and deserved a "financial penalty".

Passenger groups had backed NR's suggestion because the fine will be paid by the taxpayer.

Although NR is officially a private company, it has no shareholders, so is effectively a public organisation.

'Systemic weaknesses'

Thousands of rail passengers suffered major problems after engineering work overran at New Year on the West Coast Main Line at Rugby in the West Midlands.

Other work was not completed at Liverpool Street station in London.

Instead of a sensible discussion, the posturing by the Office of Rail Regulation and Network Rail has resulted in the Treasury benefiting, not passengers
Anthony Smith, Passenger Focus

The ORR said that customer watchdog Passenger Focus, as well as train operators, had supported NR's alternative to a fine.

But its chief executive, Bill Emery, said the fine must stand.

"We remain convinced that the systemic weaknesses we have found in Network Rail's approach to the planning and execution of its engineering work are a serious and continuing breach of its licence, meriting a financial penalty.

"We consider that to accept NR's proposal to mitigate the fine in its entirety would reduce the effectiveness of the incentive that penalties place on the company to secure compliance with its licence."

The New Year overrun was largely caused by staff shortages. Half a specialist engineering team working on overhead lines failed to turn up for work.

Responding to Friday's ruling, Iain Coucher, NR chief executive, said: "We had suggested that this sum be invested into the rail network to fund improvements which would benefit passengers, a suggestion supported by many in the industry.

"We are disappointed that this won't happen. However, we accept today's judgement and will be paying the fine shortly."

Mr Coucher insisted that since the problems at New Year, his company had made "significant changes to the way we plan and carry out big improvement work".

'Posturing'

Chief executive of Passenger Focus Anthony Smith said his organisation had suggested a series of improvements that could have been implemented with the 14m.

But he said: "Passengers will be extremely disappointed that the Office of Rail Regulation and Network Rail could not come to a sensible compromise.

"Now 14m of extra investment has been lost to passengers.

"Instead of a sensible discussion, the posturing by the Office of Rail Regulation and Network Rail has resulted in the Treasury benefiting, not passengers.

"This is not the joined-up railway and thinking that passengers expect and deserve."




SEE ALSO
Rail company defends Easter work
20 Mar 08 |  England
New Year rail delays 'a fiasco'
08 Jan 08 |  UK Politics

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