Rail chiefs blasted over £1.4m 'rewards for failure'

A report out today said it was wrong for bosses to share more than £1.4million after thousands of passengers were hit by engineering overruns in the New Year that landed the firm with a £14million fine.

In one of the most damning critiques from the Commons transport select committee, it condemned 'serious management failures'.

A deserted Liverpool Street Station after engineering works during Christmas and New Year overran. Network Rail was fined a record £14m for three delays in engineering works including the West Coast Main Line and Glasgow

'It is quite extraordinary for Network Rail to reward its senior managers with huge financial bonuses in a year where passengers have been humiliated and inconvenienced by three separate major engineering fiascos,' it said.

Committee chairman Louise Ellman said: 'The bonuses added insult to injury for long-suffering passengers who have had to struggle with the consequences of the company's failings.'

The MPs condemned the ' widespread complacency' and 'flawed management' of Network Rail and its senior executives.

They also criticised its lack of accountability and demanded better scrutiny of the company, which receives half its £6billion funding from the taxpayer.

Critics demanded that the top Network Rail bosses hand back their windfalls, but they refused.

The bonuses were paid after Network Rail made a 'profit' of £1.2billion, and are part of £55million the firm has divided up among staff, giving all 35,000 employees at least £871 each.

It comes as passengers face inflation-busting fare increases for 'cattle-truck' conditions.

The Network Rail overruns - on the West Coast Main Line, London's Liverpool Street Station and in Glasgow - 'laid bare an entire catalogue of management failings for all to see', said the Commons committee.

However, Network Rail still saw fit to give executives hundreds of thousands of pounds each.

Chief executive Iain Coucher received a £305,581 performance bonus and a £205,000 target bonus, taking his total salary package to £1,049,581.

Infrastructure director Peter Henderson has a bonus of £219,391 plus a £153,000 target bonus, making a total package of £761,391.

Finance director Ron Henderson has a bonus of £208,944 plus a target bonus of £153,000, to give him a total of £746,944.

Former chief executive John Armitt - now chairman of the Olympic Delivery Authority - received a £178,000 target bonus.

The MPs also criticised Network Rail chairman Sir Ian McAllister. He said he had not gone to work during the crisis because he would 'only get in the way'.

They said: 'We fear that the lack of a sense of urgency manifested by the Network Rail chairman is symptomatic of widespread complacency within Network Rail.'

Mr Coucher said: 'We are disappointed by the comments in the report.

'We have invested over £2billion applying the lessons from the unacceptable overruns at New Year.

'We are determined to continue to build a bigger and better railway.'