Network Rail warned on bonuses after 'mixed' performance

Bonuses this year for top Network Rail (NR) directors must reflect the fact that the company's 2009/10 performance has been "mixed", rail regulators said today.

NR should back up any bonus decision "with clear evidence of the benefits that have been brought to the railway as a whole", said Office of Rail Regulation (ORR) chief executive Bill Emery.

There was strong criticism last summer of the level of 2008/09 NR bonuses, which saw top NR directors get deals worth a total of around £1.2 million.

This came despite a letter from Mr Emery to NR's remuneration committee - the body that decides on bonuses - pointing out the company's shortcomings, including problems on the West Coast Main Line.

NR chief executive Iain Coucher had announced earlier in 2009 that he would not take his annual bonus but still got £150,000 last year as part of a three-year rolling management incentive scheme.

Today, Mr Emery said he had written to the remuneration committee about this year's bonuses - due to be announced later this month.

The ORR said today: "The letter to the remuneration committee makes it clear, in the current economic situation and given NR's mixed performance, that the company must back up any decision on bonuses with clear evidence of the benefits that have been brought to the railway as a whole."

Mr Emery said: "Over the last 12 months and taking all of the evidence into account, our independent view is that we judge NR's performance has been mixed.

"There are some positives, such as regional train performance, passenger safety generally has been good, and there has been some success with level crossings. The early work on the £7.6 billion enhancement programme has been progressing steadily, and work continues to reduce disruption caused by engineering works."

Mr Emery went on: "However, there are areas of concern, most notably NR's asset management policies for structures such as bridges and viaducts, and we are not yet convinced of the efficiency gains the company is claiming.

"Although passenger safety has generally been good, we cannot forget that during the past year three railway workers lost their lives, reminding us all that there is simply no room for complacency in health and safety.

"In some areas, we consider that the level of our intervention and the pressure we needed to apply went above what should have been required."

Mr Emery said NR "must redouble its efforts to meet the tough but achievable challenges, particularly over efficiencies" that ORR had set the company for the period 2009 to 2014.

NR said today that punctuality on the railways was now at the highest level since records began in 1992.

In the period from April 2009 to March 2010, a total of 91.5% of trains ran on time.

NR's operations and customer services director Robin Gisby said: "Passengers are today experiencing the most punctual train service ever provided on Britain's railways.

"This has been accomplished through the sheer hard work and determination of tens of thousands of rail staff across the country working for both NR and the train operators."

He went on: "This is just one of a number of records set on Britain's railway this year, with record numbers of passengers travelling on record numbers of trains at record levels of safety with record levels of satisfaction.

"But we are far from complacent and realise that passengers still experience some delays, albeit much less often than in times past. Our focus in the years ahead will be to drive performance to even higher levels, with particular attention given to reducing the number of very late services."

Gerry Doherty, general secretary of the Transport Salaried Staffs Association, said: "Iain Coucher is the real life Fat Controller - he is the fattest of the public sector fat cats.

"He makes Dick Turpin look like an amateur when it comes to daylight robbery. He earns six times more than the Prime Minister for managing a state-owned railway maintenance firm.

"He has paid himself £6 million so far at Network Rail and that will rise to £7 million next month if he has the brass neck to ignore the Prime Minister, the Transport Secretary, the ORR and the travelling public.

"The pay and perks that NR directors award themselves is a public scandal and it ought to be stopped by the coalition immediately."