Network Rail makes £758m loss

Click to follow
The Independent Online

Network Rail said today it had fallen into the red - but said its debt levels were better than expected.

Network Rail said today it had fallen into the red - but said its debt levels were better than expected.

The rail infrastructure operator said it made an operating loss of £758 million in the year to 31 March against an operating profit of £80 million last time.

It said £544 million of that was attributable to a change in phasing of network grant income from the Strategic Rail Authority (SRA).

It said its debts of £12.6 billion were some £1.3 billion lower than forecast in October 2002.

NR said all the company's staff would receive a bonus this year.

Chairman Ian McAllister said NR had achieved a great deal during the year, including reducing train delay minutes to their lowest level in four years.

"Following this, I think it is only right that all NR employees will receive a bonus this year, " he said.

Mr McAllister said punctuality had improved although targets had been missed and the losses had been expected.

Increased income meant the organisation would make a profit over the next five years, he told BBC Radio 4's Today programme.

"When we took over some 20 months ago, we said it would take about 18 months before we could get a grip on the situation and some three to five years before we saw substantial improvement," Mr McAllister said.

Statistics proved the pace of improvement was now speeding up, the chairman argued.

He defended the bonuses being awarded, saying they had been clearly set out against three targets of punctuality, improved financial performance for the taxpayer and improving the condition of the assets.

"The bonus system is quite transparent , it was completely laid out, it is open to scrutiny and the executives earned those bonuses and the bonus system cascades through the company," he said.

"What we need is a balanced scorecard. It would be possible to achieve levels of punctuality whilst at the same time abandoning financial efficiency or not looking after the assets correctly.

"That has happened in other railways around the world. You can achieve an improvement in punctuality at the long-term cost of deteriorating punctuality.

"So you need a balanced scorecard and that was agreed with the regulator."

Transport Secretary Alistair Darling said: "Network Rail is making progress in resolving the problems inherited from the disaster that was Railtrack.

"Performance is improving, they have made an encouraging start in reducing costs and in 2003-4 replaced more railway than at any time since before British Rail was created, but there is still more work to be done."

Comments