Network Rail posts pre-tax profit of £747m

The state-backed Network Rail posted a profit for the first time yesterday, recording performance figures which mean that directors will receive bonuses worth hundreds of thousands of pounds each in the new year.

The infrastructure organisation announced pre-tax profits of £747m for the six months to 30 September, compared with a loss of £108m a year earlier.

It was the first surplus since Network Rail was created in 2002 following the bankruptcy of its predecessor Railtrack.

Its figures showed that during the six-month period 89.5 per cent of trains were on time - the highest level for seven years.

Iain Coucher, the organisation's deputy chief executive, said the company was aiming for 90 per cent punctuality in 2007-2008 and 93 to 94 per cent within the next few years. But he indicated that the proportion would not go much higher without major investment.

He said that commuter lines into London were regularly achieving more than 90 per cent, but that long distance routes were dragging the figures down.

Ian McAllister, the company's chairman, said rail was now the safest form of transport and there had been a 90 per cent reduction in the risk of trains passing red signals over the last five years following the introduction of an automatic braking system.

Around £1.1bn has been taken out of the cost of operating and maintaining the railway infrastructure in the past two and a half years, he said. At the same time, a 7 per cent increase in capital expenditure meant almost £1.5bn had been invested in the network over the last six months.

Company profits are used to either reduce debt or re-invest in the railway.

The chief executive, John Armitt, earned more than £1million in the last financial year, including bonus payments of more than £350,000, while his deputy Iain Coucher earned £924,000.

Gerry Doherty, general secretary of the transport union TSSA, welcomed that the profits would be reinvested in infrastructure. "Train operating companies should be run for the benefit of the public as well. We are talking about a vital public service, which is run as such in the rest of Europe, not a lottery run for the benefit of private shareholders," he said.

Anthony Smith, chief executive of the watchdog body Passenger Focus, said: "The more profit Network Rail makes, the more it will be able to invest in essential improvements for passengers, such as ensuring that more trains arrive on time and creating more capacity."

However, Keith Norman, general secretary of the train drivers' union Aslef, attacked the "smug contentment" of the Government and Network Rail at the news.

"Ask any commuter waiting at a bleak railway station for an overcrowded train how pleased they are about profit levels and they will tell you what the real priorities should be," Mr Norman said, adding: "You don't judge the success of a public service in pound notes."