Network Rail wasting billions, train chiefs say

Train company chiefs accused Network Rail yesterday of wasting "billions of pounds'' because the infrastructure company escapes the kind of competitive pressures faced by operators.

David Franks, the chief executive of the train division of National Express, said the state-backed network company's battle with the Rail Regulator over costs was nowhere near as demanding as the stringent disciplines in bidding for franchises. "Unfortunately there are not two Network Rails competing with each other,'' he said.

The National Express chief's comments come in the wake of a bid by Network Rail for £29bn of funding for the next five years. The infrastructure organisation is seeking £8bn to upgrade the network. Mr Franks argued that at least one major train operator should be allowed to take over responsibility for the infrastructure in its area in order to provide a financial "benchmark''.

Mr Franks, speaking at a hearing of the Commons Transport Select Committee, pointed out that Merseyrail, which had responsibility for trains and track, had saved about £33m after taking over the infrastructure from Network Rail.

He said that over the industry's five-year control period it would be possible to save "hundreds of millions and possibly billions of pounds".

Tom Smith, the planning director of the Go-Ahead Group, said Network Rail was run like a "government department or a local council'' rather than a commercial organisation. Paul Furze-Waddock, the commercial director of the First Group, accused Network Rail of being "very lazy'' when it estimated the cost of work to be completed. He said the infrastructure organisation always increased estimates by 35 per cent when considering costs. That could amount to up to £100m on any project.

Even at the final stages of the costing process, Network Rail built in a "huge'' amount for contingencies. "It is a very lazy way of coming up with quick, reliable estimates,'' he told MPs.

Jonathan Metcalf, the chief operating officer at Great North Eastern Railways, said that while the infrastructure organisation had concentrated more on the network's assets, compared with the now defunct Railtrack, there was considerable concern about the scale of costs.

The train company chiefs accused the Government of demanding too much information during the bidding process.