Network Rail saw profits climb above £1 billion for the first time last year, but the group missed its punctuality target again.
Almost 730,000 trains ran late last year, which new chief executive Mark Carne claimed was partly due to “congestion as the railway witnessed growth of 5.7 per cent in passenger journeys during the year”.
The percentage of trains that ran on time fell to 90 per cent in the year to April, down almost 1 per cent on a year ago and well below the firm’s punctuality target of 92.5 per cent.
But Network Rail pointed out the number of passengers on the railways has grown by more than 500 million to 1.6 billion over the last decade, while the number of train services has risen only 16 per cent in the same period.
Carne added that this year’s catastrophic winter of flooding had also had an impact. Storm damage, including the destruction of part of the railway line to the west country at Dawlish, cost Network Rail £240 million this year, but over half of that cost was covered by insurance.
Overall the state-owned company’s pre-tax profit jumped by 29 per cent to £1.04 billion for the year to April, mostly due to accounting gains. Revenues rose to £6.3 billion from £6.1 billion a year earlier.
“We are in the middle of a rail renaissance,” Carne said, “with record levels of passenger numbers and record levels of investment.
“This flourishing sector is investing heavily to improve the railway for today and for tomorrow.”
But he conceded that soaring commuter numbers and over-packed carriages posed “challenges” for the network, telling BBC’s Today programme that “we need to do more to improve the reliability of the railway”.
Carne added: “We did not hit our regulatory targets... and I think we know we have to do better and we are very determined to address those issues so that we can provide the high quality of service that passengers expect.”
Network Rail said it had invested almost £20 million a day during the last 12 months, including the £550 million renovation King’s Cross and a new concourse at Reading station “to unblock one of Britain’s worst railway bottlenecks”.
But that spending meant Network Rail’s debt mountain grew still higher, soaring to almost £33 billion from £30.4 billion in June. The heavy cost of Network Rail’s borrowings, which is guaranteed by the Government, has been flagged as a concern by industry analysts.
The industry regulator, the Office of Rail Regulation, has warned that it will approach £50 billion by the end of the decade, absorbing a third of Network Rail’s budget by 2029. The British taxpayer already pays some £4 billion a year into the country’s railways.