Network Rail chiefs paid huge bonuses

Network Rail chiefs, who have missed out on performance–related bonuses, have still received huge payouts under a scheme agreed by Railtrack's administrators, it was revealed today

Network Rail's safety and compliance director Chris Leah received £451,000 in administration–linked bonuses, while chief executive John Armitt received £225,000.

In addition, technical director Richard Middleton received £189,000 and financial director Sebastian Bull got £216,000.

As Network Rail (NR) failed to meet a train punctuality performance target of 83 per cent in 2002–03, no other bonuses were paid out.

But the not–for–profit company's annual report said today that if targets for 2003–04 were met, directors could get bonuses equivalent to 18 per cent of salary and up to 60 per cent of salary if future targets were hit earlier.

NR's predecessor company Railtrack was put into administration in October 2001 and was replaced when it came out of administration by NR.

Administrator Ernst & Young agreed that bonuses should be paid. Mr Leah's bonus, for example, includes a £150,000 "retention" payment and a £300,000 "loyalty" payment.

Mr Armitt's bonus is "for the successful transfer of Railtrack plc out of administration". In all, these administration–related bonuses totalled £1.14 million.

Commenting on 2002–03, NR chairman Ian McAllister said: "This was a year of significant change. We have always said that there are no quick fixes to the accumulated problems facing Britain's rail network, but during the first six months of Network Rail's ownership we began to put in place the building blocks to deliver a sustainable improvement in performance of the rail network."

He went on: "We achieved good performance in key areas with a 28 per cent reduction in temporary speed restrictions, the incidence of broken rails fell 17 per cent while signals passed at danger were down 7 per cent.

"The increase in train delays attributable to infrastructure was disappointing and provides a clear focus for the year ahead. We are targeting a 20 per cent improvement over three years.

"We are determined to deliver safe, reliable and efficient rail infrastructure. Efficiency will be a particular focus in the months ahead – our business plan recognised that costs were unacceptable and unaffordable in the longer term.

"We have set ourselves a target of achieving overall efficiencies equivalent to 20 per cent of costs, or £1 billion, by March 2006."

Union leaders reacted with outrage and said it was further evidence that the rail industry was still suffering from the "fat cat" culture.

Mick Rix, general secretary of the train drivers' union Aslef, said: "In view of the continuing deep problems throughout the railway network, 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.

"Drivers do not receive a bonus for making sure trains arrive on time – it is part of their job. This is another example of carrots at the top and sticks at the bottom, which is no way to run a railway."