Network Rail directors given big bonuses despite worsening service

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Five directors of Network Rail, the company set up by the Government to take charge of Britain's railways, received more than £1m in bonuses last year even though train performance deteriorated.

Executives at the not-for-profit company also stand to gain minimum bonus payments this year equal to 18 per cent of salary even if one in five trains continues to run late.

The £1.1m in bonuses for last year were paid to ensure "continuity of management stewardship" while Network Rail's predecessor, the privately owned Railtrack, was taken out of administration and handed over to a new owner.

Chris Leah, Network Rail's safety and compliance director, received the biggest "retention and loyalty" bonus of £451,000, taking his total pay to £872,000.

Network Rail's chief executive, John Armitt, received £761,000 including a one-off bonus of £225,000. Other bonuses were paid to three former Railtrack directors - Sebastian Bull, Richard Middleton and John O'Brien - who are no longer with the company. Mr Bull and Mr Middleton also received pay-offs of £300,000 each for loss of office.

Rail unions, passenger watchdogs and opposition MPs attacked the payments. Mick Rix, general secretary of the train drivers' union Aslef, said: "Passengers will find this continuation of the fat-cat culture which scarred Railtrack utterly incomprehensible. Now that Network Rail is a not-for-profit company, the Government should ensure that it shakes off the worst excesses of the privatised culture."

Tim Collins, the shadow Transport Secretary, said: "Few people would begrudge a sizeable payment to people who deliver a noticeably better railway system. Regrettably, however, Network Rail is currently delivering a huge amount of overspending and a dramatic record of under-performance."

No performance-linked bonuses were paid in 2002-03 because only 79 per cent of trains ran on time compared with Network Rail's target of 83 per cent. This year bonuses will be paid if 82 per cent punctuality is achieved.

A Network Rail spokesman said last year's bonuses were all approved by Ernst & Young, Railtrack's administrators. This year, bonuses would only be paid in response to "significant improvements" in the network.