Record £14m fine for Network Rail

Rail infrastructure company Network Rail (NR) was today fined a record £14m following serious engineering work overruns over the New Year.

The fine was imposed by the Office of Rail Regulation (ORR) which had been investigating the overruns, the most serious of which was on the West Coast Main Line.

The ORR decision comes on the day that NR chairman Sir Ian McAllister, who stayed at home during the overrun crisis saying he would only get in the way if he went into work, is officially knighted at Buckingham Palace.

The ORR said the fine was "to reflect the serious nature of this breach, the impact it had already had on passengers and rail freight users and the need for the company to take urgent action to improve its approach".

The ORR also ordered NR to "remedy systematic weaknesses in its planning and management of engineering projects and in its communication with train operators about progress with such projects".

In addition, ORR also ordered NR to provide a clear plan of how it intends to complete the upgrade of the West Coast Main Line, currently due to be completed by December.

NR has already announced that the West Coast Main Line (WCML) will face further closures over Easter as engineering work continues.

According to the BBC, the line will also have to close at some weekends away from bank holidays during the summer as the work is running late.

The WCML work which overran at the New Year was at Rugby in the West Midlands. The work had to go on for four extra days with thousands of passengers having to take coaches between Northampton and Birmingham as the line was shut.

The other overruns which hit passengers over the festive period were at London's Liverpool Street station and at Shields Junction near Glasgow.

ORR chief executive Bill Emery said: "What happened over the New Year was totally unacceptable for passengers and freight customers, and to train operating companies. The weakness in NR's management of these projects had a serious impact on all of them and on the reputation of the railway.

"It is quite clear from our thorough investigation that NR is failing to manage major engineering work as consistently well as it should. This is due particularly to weaknesses in the company's planning, risk assessment and site management of projects as well as to failures of communication within the company and with train operators. We have published a draft Order directing them to address these failings and thus reduce the risk of similar events in the future."

He went on: "It is right that we should also impose a fine to mark the seriousness of this breach of NR's licence and to send a clear message to the company's board and senior management that it needs to address the weaknesses we have identified as a matter of urgency.

"Given the scale of the investment programme on the rail network, improved project planning and management will bring real benefits to NR's customers in terms of improved capacity, performance and value for money.

"In addition, the company has accepted that it does not currently have a robust plan, agreed with operators, to deliver the upgrade work to the WCML needed for the December 2008 service improvements. We have therefore ordered it to produce quickly a plan on how it will do this."