So there's absolutely no friction at the top of Network Rail – got it?

Parliamentary Business: Nobody has suggested they don't get on – simply that it's tough for any executive to have his power curbed

Mark Leftly
Wednesday 22 July 2015 01:38
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Network Rail has sent me two on-the-record quotes to prove that a story I had not put to the organisation, nor was going to, has “no basis”.

There was concern that I was going to run a story on how the new chairman, Sir Peter Hendy, and the chief executive, Mark Carne, were likely to suffer a personality clash that would almost certainly lead to the latter’s departure.

Here are the formal responses:

Sir Peter Hendy said: “I’ve got to know Mark well since he was appointed in February 2014. I like him. He’s got a very tough job and we are already working closely and well together to use my experience to get the company to where it needs to be in helping create national economic growth, jobs and homes.”

Mr Carne said: “Peter is a strong addition to our board and his extensive rail experience will be invaluable in helping me and my executive team deliver further improvements for a better railway. We get on well and I look forward to helping Peter with his review and tapping into his knowledge and expertise.”

Lovely stuff.

OK, I’m being unfair.

There was confusion. I’d written a comment piece elsewhere warning that it would be difficult for Mr Carne to remain in post when such a formidable, hands-on chairman had been imposed on him in the form of Sir Peter. He has just joined from Transport for London to sort out Network Rail’s extensive woes.

This is the speculation within the rail industry, although Mr Carne’s friends insist he won’t quit and feels far from undermined. “If you think that about Mark Carne, then you don’t know Mark Carne,” said one.

Nobody has suggested to me that they don’t get on or that there would be an actual personality clash, simply that it is tough for any clever chief executive to have their power curbed. “If you’re a chief executive and Sir Peter Hendy is brought in above you, you would be stupid not to quit,” said a rail source. “And Mark Carne is not stupid.”

I’d mentioned this in passing last week and Network Rail obviously panicked that yet another (as officials see it) unfair article would be written about it.

This pre-emptive spinning is instructive, illustrating the pressure the operator of 20,000 miles of rail track and infrastructure finds itself under.

Officials are increasingly sensitive to criticism. They are annoyed by reports – including mine – that engineering overruns have caused Network Rail to miss train punctuality targets, when they account for less than 1 per cent of delays.

The rail regulator and top industry executives laugh at this defence, given the chaotic scenes caused by engineering delays at London stations over the past year. But Network Rail has a point, if not an overwhelming one, given this is a very visible contributor to the problems.

More importantly, executives are frustrated by the criticism they are receiving for Transport Secretary Patrick McLoughlin’s “pausing” of the electrification of the Midland Main Line and TransPennine routes.

The current five-year capital spending period, CP5, is budgeted at £38.5bn and now looks to be in a bit of a mess, while Network Rail, Mr McLoughlin and the Treasury are all fretting over a debt that is only a few years away from topping £50bn. Some projects planned for CP5 will now, as one Network Rail executive puts it, “inevitably” run into the 2019-24 spending period.

What particularly annoys Network Rail’s executives is that Mr Carne’s predecessor, Sir David Higgins, expressly warned the rail regulator that £38.5bn wasn’t enough for what will be one of the biggest overhauls of our Victorian-era railways.

Passenger numbers are at their highest levels since the 1920s and Network Rail is desperately trying to prevent the whole system from buckling under this most extraordinary pressure. It’s pretty noble work, when you think about it.

Back in September 2013, in response to the Office of Rail Regulation capping the budget at £38.5bn for CP5, Sir David responded: “We believe that the cumulative impact of the scale and pace that the ORR has proposed across a range of activities makes the package as a whole unbalanced and therefore unrealistic.”

This week, Mr McLoughlin confirmed to the Transport Select Committee that he did not realise until after the general election that he would have to put those two electrification projects on hold.

But surely he was not surprised that there would be delays somewhere in CP5.

After all, we revealed in March that Richard Parry-Jones’ job as chairman was under threat, and off he went three months later. We also revealed that Mr McLoughlin was looking to put his own “special director” on Network Rail’s board, which he duly did, in the shape of former Eurostar boss Richard Brown.

Network Rail is in trouble, and that’s been known for some time.

Let’s hope that Sir Peter and Mr Carne do indeed form as powerful a partnership as their quotes suggest; the last thing the railways need is more instability at the top. They now need some time to sort out these many problems, which are, we should acknowledge, not entirely of Network Rail’s making.

Twitter.com/@mleftly

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