The Government has decided to press ahead with radical plans to strip Railtrack of its responsibility for running the national rail network and hand the job instead to the train operating companies.
The move comes amid further turmoil at Railtrack which sacked its chief operating officer, Jonson Cox, yesterday because of the continued deterioration in its performance. He is the second board executive to be removed in two months.
Downing Street and the Treasury has decided that the only way to achieve a sustained improvement in rail services is to give the franchise operators day-to-day responsibility for the track on which their trains run.
Under the new system, train operators such as Virgin, National Express, Stagecoach and FirstGroup, would cease paying access charges to Railtrack and instead lease the track from it. Railtrack would continue to be responsible, however, for the renewal of the infrastructure and some enhancement projects.
Tony Blair is expected to wait until after the Labour Party conference in October to unveil the upheaval which may anger activists who have been pressing for the renationalisation of Railtrack.
Mr Cox, who joined Railtrack less than a year ago from Yorkshire Water and had only been chief operating officer for nine months, has paid the price for the alarming deterioration in the company's performance.
The latest figures from the Strategic Rail Authority show that the number of trains arriving on time has fallen from about 90 per cent prior to the Hatfield accident last October to 81 per cent now. The proportion of train delays attributable to Railtrack has risen from 40 per cent to 50 per cent.
Steve Marshall, Railtrack's chief executive, will take direct control of Mr Cox's responsibilities for network operations. Mr Marshall also took over direct responsibility for major enhancement projects such as the £6.3bn modernisation of the west coast mainline following the removal in June of Simon Murray, the board director for major projects and investment.
Mr Cox, who was on a salary of £300,000, will not receive a pay-off. Railtrack will continue to pay his monthly salary until he finds another job. He has 13 months of his contract left to run.
John Robinson, Railtrack's chairman, said: "We have to perform better, both in terms of safety and train performance. Things have not been working as well as they should and part of that is because of the structure. In any company the chief executive should have his feet on all the levers. In Railtrack we had one too many chiefs."
Railtrack has also reversed plans put forward by Mr Cox to scrap its structure of seven regional zones. These will now remain with each of the seven zone directors reporting direct to Mr Marshall.
Mr Robinson rejected suggestions that the new board structure was heaping too much work on Mr Marshall, who is now paid £450,000 a year but has given up his entitlement to £675,000 worth of share options and bonuses this year. "It is unfair to say Steve will be overstretched. This system will work well," he added.
The Railtrack chairman also refused to be drawn on the Government's intention of handing operational control of the network to the train operators.
He said: "There is a lot of gossip around and I would rather comment on that if and when it happens. What I would say is that there certainly needs to be a much closer and better working relationship between Railtrack and the train operators and that is already beginning to happen."
Railtrack insiders say Mr Cox was out of his depth, having been promoted to chief operating officer after being with the company for only 11 weeks.Reuse content