Mark Leftly: Network Rail challenge is like running a marathon but there's no gold medal

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The Independent Online

Outlook Sir David Higgins must think that the Olympics was a doddle. Having overseen the construction of London 2012 well under the (admittedly revised) budget of £9.3bn, the Aussie businessman decided to take charge of an organisation that really has earned a poor reputation over the years, Network Rail.

Running the country's rail network and its most prominent stations is never going to earn you plaudits, no matter what good you do. When trains are late and track is being relaid for safety purposes, Network Rail will inevitably get the blame, even though it doesn't run the franchises and has to upgrade the creaking rail infrastructure.

But even Sir David, who was under such scrutiny at the Olympics Delivery Authority, must be shocked that his £99,082 bonus has been so highlighted. Compare that with a predecessor, Iain Coucher, who took home a £641,000 bonus on top of a £631,000 base salary in 2010.

Sir David, frankly, looks like pretty good value for money, particularly given his efforts to commercialise the organisation by hunting out lucrative advisory work overseas. Put his recent success on top of that and you have to think the UK is lucky to have retained his services.

But Network Rail's debt burden continues to be a concern. Yesterday, it emerged that net debt had jumped £3bn to more than £30bn in the year to April.

Let's make an utterly irrelevant set of comparisons to try to put that figure into some sort of context. That debt is more than the GDP of Albania, Estonia or Equatorial Guinea; I'm not sure how well run their railways are, but those countries certainly wouldn't (or be able to) borrow that much on getting people from a to b. Now, Network Rail quite fairly points out that the figure is so eye-watering because it is spending £14m a day on tracks, signalling and expanding the railways. Yet fewer trains ran on time last year than in the previous 12 months, and that is the statistic commuters really care about.

What Network Rail should also point out is how terribly precarious is the nature of that debt. Those of us who write often on infrastructure and transport were guilty of missing a massive story towards the end of last year, when Network Rail was sweating over having to renegotiate around £14.5bn of its bonds.

Most commentators were preparing for the Office of National Statistics to change how the Retail Price Index, the key inflation measure, was calculated in January. Surprisingly, no alteration was made, which came as a huge relief to Network Rail.

Any change would have, in the words of non-executive director Mike Firth, "trigger[ed] a mandatory redemption event" on those bonds, as it would have changed the basis on which the debt was issued. As well as the time it would have taken to renegotiate all those deals, Network Rail could have found itself having to pay more on that debt, sucking money out of track improvements and station refits.

A rail insider has even claimed the size of the debt would have meant the Government would have been compelled to come in and help Network Rail repay some or even all of the £14.5bn. The organisation has said it would have made sure the result of any negotiations would have left neither issuer nor noteholder any worse off, but that seems to be over-relying on the public spirit of the suits in the money markets.

Unfortunately for Sir David, and to the frustration of many of his fellow board members, few will ever praise his and their successes at Network Rail. The Olympics was seven years of hard graft and criticism followed by a fortnight's celebration.

With Network Rail, there's never a straight two weeks of bliss.