Rail bosses get massive bonuses in spite of delays

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The Independent Online

Bosses at Network Rail are being urged to hand back nearly £1m in bonuses after it emerged that they have been rewarded with performance-related payments despite the severe disruption caused by delays in completing engineering work.

Iain Coucher, the chief executive, received the highest bonus, £305,581, on top of his salary of £539,000. The infrastructure director, Peter Henderson, received £219,391 in addition to his £399,000 salary, and the finance director, Ron Henderson, pocketed an extra £208,944 on top of a £385,000 salary. A total of £55m in bonuses was paid to Network Rail staff, an average of £871 for each of its 35,000 employees in 2007-08.

However, there was criticism of the big bonuses for the chiefs of the infrastructure company following the maintenance failures over the New Year break at Rugby which led to long delays on trains and the use of buses for holiday travellers. Union chiefs said the bonuses should be handed back because of a "winter of rail misery".

Meanwhile, the RMT transport union has voted to stage a weekend strike from 14 June in a dispute over jobs and conditions. Its general secretary, Bob Crow, said: "Once again we have Network Rail management showing that there's one rule for those in the big house and another for everyone else. It is Network Rail bosses who have caused this dispute and who presided over last Christmas's massive mess, so why haven't they withheld their own fat bonuses?"

The shadow Transport Secretary Theresa Villiers said she was "astounded" at the size of the bonuses paid to senior management. She said: "Willie Walsh [the BA chief executive] did the decent thing and handed back his bonus because of the Terminal 5 disaster and yet Network Rail happily doles out hundreds of thousands of pounds to its management. This episode shows yet again that the company is accountable to no one – not its customers or the taxpayer. It is high time the regulator had much more effective powers to punish underperformance by confiscating management bonuses. We need a means of inflicting real financial pain on Network Rail when they fail."

The Liberal Democrat transport spokesman, Norman Baker, said: "This is money that will have been taken from the Network Rail investment pot, and should instead be invested in the railways."

A spokesman for Network Rail, Kevin Groves, said: "It's been a great year with record levels of punctuality. The passengers have voted with their feet on to the railway. We only reward executives if passengers have seen better service over the year."

The delays in maintenance led to a £3m reduction to the bonuses and almost £25m in fines, compensation to operators and extra engineering costs.

Network Rail's remuneration committee imposed a further penalty and reduced directors' bonuses. The combined effect has seen directors' annual bonuses cut by 14 per cent, or almost £150,000.

The Network Rail chairman Ian McAllister said: "Every single employee at Network Rail has paid a price for the over-runs at New Year. Passengers have seen improvements and the company must reward all its people for meeting the majority of its targets."