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Arise Sir Ian... and pay £14m for rail fiasco
Jonathan Prynn, Consumer Affairs Editor28 Feb 2008
Network Rail was fined a record £14 million today for the New Year travel fiasco - on the same day its chairman picked up a knighthood.
The penalty is the biggest ever handed out by the industry's watchdog, the Office of Rail Regulation.
Hours later, Network Rail chairman Ian McAllister was knighted at Buckingham Palace. During the disastrous overrun of engineering work at Liverpool Street and Rugby at New Year, he had stayed at home, saying he would only "get in the way" if he went into work.
Chris Bolt, chairman of the Office of Rail Regulation, said the size of the fine sent a "very clear signal" to the company, which is responsible for track maintenance. In its report, the watchdog said passengers suffered "serious and unacceptable disruption" because of the late work. Two of Britain's busiest routes, the West Coast mainline and the line to Essex and East Anglia, were effectively closed for the first week of January.
Mr Bolt said the chaos was a major breach of Network Rail's licence conditions, one of the factors taken into account when bonuses are set for directors.
Critics say the fine was at the lower end of what was expected and was "pointless", unless bosses faced bonus cuts. Liberal Democrat transport spokesman Norman Baker said: "All it means is Network Rail will have £14 million less to invest in railways, and the Chancellor £14 million more. The only sensible leverage is to penalise directors through their bonuses."
Last year Network Rail chief executive Iain Coucher got a £79,000 bonus and a £100,000 long-term incentive payment. Engineering director Peter Henderson and finance director Ron Henderson each got a £59,000 bonus and £75,000 incentive payment.
Network Rail will also have to pay millions of pounds in compensation to the worst affected operators, Virgin Trains and One railway.
Today's report lists a litany of mistakes at Network Rail, which was accused of losing control of its engineering contractors. Some operators said they only heard about the problems at Rugby and Liverpool Street through the industry "grapevine" rather than officially from managers.
The report details how night after night staff failed to turn up. Many of those who did arrive did not show enough "drive and urgency" to get the work done on time.
Reader views (3)
Considering the state of this country and the world, particularly Iraq, I think Tony Blair should be knighted as well!
It is almost five years since Iraq was invaded, and now it is the most democratic country in the world!
- Mafia Rules, London UK, 29/02/2008 11:57
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What poor value the honours system is becoming.
- Mark Wright, Verona, Italy, 29/02/2008 11:02
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Now that he's got his knighthood perhaps he'll do the ONLY honourable thing and resign!
Is Mr MoneyBags a New Labour crony?
- Fraser, Telford Park, 28/02/2008 19:17
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