Rail bosses on track for bonuses

Network Rail chiefs are in line for big bonuses after the infrastructure operator announced yesterday that it beat its target for train punctuality last year.

Network Rail chiefs are in line for big bonuses after the infrastructure operator announced yesterday that it beat its target for train punctuality last year.

The outperformance has also resulted in Network Rail raising its punctuality targets for the next three years with the aim of running nine in 10 trains on time from April, 2008 onwards - one year ahead of schedule.

The proportion of trains running on time in the financial year just ended rose from 81.2 per cent the previous year to 83.5 per cent after Network Rail cut the number of "delay minutes" attributable to it to 11.5 million - a reduction of 2.2 million. The target was to cut delay minutes to 12.3 million. On a monthly basis, punctuality is now marginally above its pre-Hatfield-crash level of 86 per cent and Network Rail said the plan was to achieve that on a rolling 12-month basis in August next year.

Network Rail also hit its two other targets on cost efficiency and the condition of the rail network, meaning that large performance payments are certain when the company's remuneration committee meets next month to decide the level of bonuses.

The bonus for hitting each of the three targets is 30 per cent of salary while the maximum bonus for outperforming them is 60 per cent. Based on last year's performance, bonuses are likely to be in the region of 40 per cent. That would mean a £187,000 bonus for Network Rail's chief executive, John Armitt, taking his pay package to £655,000. Iain Coucher, the deputy chief executive, would see his basic pay of £416,000 bolstered by a bonus of £166,000.

Most of Network Rail's 32,000 staff will also receive a performance bonus. Last year the payment was £680 a head. This year it is expected to be closer to £1,000.

Mr Coucher said Network Rail was "pleased but not satisfied" with its performance last year, adding: "We are still only firing on three cylinders. We are still only two years into a three- to five-year recovery programme so there is still a long way to go."

The company cut costs by £420m last year. This included a £100m saving on operations after the workforce was slimmed by 1,500 and a £250m saving on its track renewals programme.

Mr Coucher said the biggest single contributor to the improvement in punctuality was the decision to take track maintenance back in-house. But reliability had also been helped by the creation of joint control centres operated in conjunction with train companies and timetable changes which lengthened the time of some journeys.