Rail industry faces civil war over compensation for passenger delays

The rail industry was last night facing a civil war over how much compensation passengers should receive for the worst-ever disruption on the network.

The rail industry was last night facing a civil war over how much compensation passengers should receive for the worst-ever disruption on the network.

As services continued to suffer from flooding and extensive speed restrictions, Railtrack set aside £150m for passengers who will have to grapple with a highly complicated compensation system.

Train operators, however, privately called for £330m and estimated that they were losing around £2m a day because travellers were resorting to other means of transport. The operating companies argued Railtrack's estimate was based on 1994-95 passenger levels which have since risen by 20 per cent.

George Muir, director of the Association of Train Operating Companies, said of the figure set aside by Railtrack: "That is not enough. The cost to the companies of continued delays as a result of the speed limits is going to be far more than that."

A Railtrack insider, however, said that the infrastructure company had arrived at the figure by examining the detail of contracts. "The train operators' figure is all about horse trading," he said.

The clash came as Railtrack posted interim profits of £175m - down by more than 30 per cent - and revealed that it had set aside £250m to pay for flood damage, rail repairs in the wake of the Hatfield crash and for compensation to passengers for disruption. The pay-outs on offer to travellers from train operators varied widely, with some offering weeks of free travel.

Holders of season tickets lasting a month or more will find it relatively easy to win redress but those who have travelled on "turn up and go" tickets will only receive compensation if they registered their claim at the time of the journey. The minimum standard for the industry is that "turn up and go" ticket holders who were delayed by more than an hour will receive a 20 per cent refund. Most train operators, however, will pay more.

For season ticket holders, each train operating company has agreed different performance targets with the shadow Strategic Rail Authority. Operators can also declare "void days" when the performance has been badly hit. When season ticker holders renew their tickets, they are entitled to extra days for each void day declared.

Passengers are not entitled to compensation if it can be demonstrated that they have been given 24 hours' notice of an emergency timetable.

Great North Eastern Railway, the operator of London-Edinburgh trains, is offering up to an additional month on its annual season ticket. Virgin Trains, which runs the London-Glasgow route, will pay compensation for season ticket holders where more than 13 per cent of trains were late or where more than 2 per cent failed to run.