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Passengers pay price for Network Rail's cost-cutting

Buy cheap, buy dear is an old adage that appears to have little resonance for Network Rail (NR).

As The Herald reveals today, problems on the West Coast Main Line (WCML) from London to Glasgow were largely due to short-term economies stemming from budget cuts at the state-backed owner of Britain's rail infrastructure.

Virgin Trains' poor punctuality on the route (at 16% almost twice as bad as the national average), led to chief operating officer Chris Gibb being seconded to NR to examine infrastructure failures. There are two worrying aspects to his finding that NR had not paid enough attention to the long-term performance of components used in the £9 billion upgrade of the route.

One is cost. In addition to effectiveness, speed is an essential component of successful maintenance and repair operation on the railway. The WCML is the busiest mixed-traffic rail route in Europe, making any delay a logistical problem. NR's chief executive Sir David Higgins has summed up the challenge in describing a major project at Bletchley near Milton Keynes carried out over Christmas as "extreme construction".

Nevertheless, equipment chosen because it was the most readily available or cheapest has had to be renewed sooner than expected, leading to increased costs in the medium to longer term. This is poor value, made worse by NR's approach to maintenance because global engineering firms are not willing to take responsibility for parts failures and on-going maintenance.

The second concern is the more fundamental one of the relationship between NR, the Office of Rail Regulation (ORR) and the train operating companies. NR was set up as an independent but Government-backed group in 2003, following the financial collapse of Railtrack as a result of its liabilities after the Hatfield and Potters Bar derailments. In the absence of shareholders, the ORR keeps Network Rail on its toes by imposing multi-million pound fines if it breaches the conditions of its licence. Mr Gibb has criticised this approach as punitive and damaging to staff morale, with engineering managers feeling particularly at risk. The system is equally unsatisfactory to the public because fines lead to improvements being postponed or are recouped in increased fares, while NR approved substantial bonus packages for three directors earlier this year.

NR's managing director for network operations Robin Gisby likes to boast about the new paint they have applied to the Forth Bridge that has ended the famous need for continuous painting. Similar long-term thinking must now be applied to the network. Taxpayers and passengers, whose cross-Border fares will rise by 6.2% in January, are entitled to expect much better value for money on Britain's railways.

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