Network Rail was only 11.5 million minutes late so bosses get bonus

Network Rail will reveal this week that it has exceeded its target on reducing train delays, paving the way for the company's board to receive bumper bonuses.

Network Rail will reveal this week that it has exceeded its target on reducing train delays, paving the way for the company's board to receive bumper bonuses.

This will guarantee John Armitt, the company's chief executive, at least a 10 per cent bonus on his £468,000 salary, but this is likely to rise to up to 30 per cent as financial targets are also met.

Network Rail will publish its business plan for 2005-06, including its report on the previous year's performance, on Thursday. Central to this will be a report on the number of minutes of train delays caused by the not-for-dividend company.

Network Rail will reveal that it was responsible for 11.5 million minutes of delays, against its target, set by the Office of Rail Regulation (ORR), of 12.3 million minutes.

As well as train delays, the bonuses paid to Network Rail executives are judged on financial efficiency and asset stewardship. It is understood that Network Rail is close to meeting these targets. It is expected to reveal that it made around £200m of efficiency savings last year.

The company's remuneration committee will meet in mid- May to determine the exact level of bonuses paid to the board. However, news that executives are on target to receive the payments will cause controversy.

Earlier this month, Chris Bolt, the chairman of the ORR, wrote to Network Rail's remuneration committee arguing that incentive payments should be cut because the company was in breach of its operating licence.

Mr Bolt was spurred to write the letter after it emerged that customers faced difficulty buying cheaper advance tickets to travel this weekend.

Network Rail dismissed the letter, pointing out that the timetabling of engineering work - the cause of the problem - was not a factor when considering executive bonuses.

As well as providing an update on performance, the business plan will see Network Rail set out aims for the coming years. This will include proposals to replace 500 to 600 miles of track each year until 2009.