Network rail 'significantly less efficient' than European firms

Network Rail (NR) falls far behind comparable European rail infrastructure companies, UK rail regulators said today.

The "efficiency gap" between NR and the rest of Europe is 34% to 40%, the Office of Rail Regulation (ORR) said.

The carrying out of "possessions" - when NR takes over the track for engineering work - is one of the areas where the company fares less well than others in Europe, the ORR said.

Publishing international data today, the ORR said: "The figures confirm NR remains significantly less efficient in maintaining and renewing its infrastructure than comparable rail infrastructure managers in Europe, with the shortfall being between 34% and 40%.

"Further engineering analysis highlights key factors behind the efficiency gap, including the way track renewals contracts are awarded and the different way possessions are carried out."

ORR chief executive Bill Emery said: "As NR is a national monopoly, we benchmark the company against its international counterparts. Our work confirms that there is a significant efficiency gap. We will now compare and publish the company's efficiency against its peers annually."

The European comparison was part of the ORR's assessment of NR's finances and efficiency published today which showed that NR made a 3.6% efficiency improvement in its operating, maintenance and renewals work during 2009-10 compared with 2008-09.

NR must make a further 18% of efficiency savings over the next four years to meet ORR-set targets.

The ORR said NR spent £6.5 billion to operate and invest in the network in 2009-10, £800 million less than ORR assumed would be spent.

Mr Emery said: "Given the current economic climate, it is absolutely critical that the rail industry makes every penny count.

"Our efficiency report shows that NR is making progress towards achieving its target of at least 21% efficiency savings by 2014. This is encouraging. But the company still has much to do in the remaining years of the control period to meet our expectations."

The ORR said NR had been in breach of its licence after timetable problems left some train companies unable to publish journey information or take reservations.

NR could face a fine, with the ORR making a final decision next month on any possible penalty.

Publishing details of NR's performance for the April-July 2010 period, the ORR said train punctuality was "encouraging", with West Coast Main Line services much improved.

But there was a poor performance on the East Coast line - which is currently being run in the public sector - with the line suffering overhead line problems and train fleet reliability difficulties.

Mr Emery said: "It is encouraging to see NR achieving good overall performance, particularly on the West Coast Main Line.

"However, despite many successes, performance on the East Coast Main Line is disappointing. NR and East Coast trains are now working to an agreed joint plan aimed at quickly improving performance. We will keep a close watch on progress.

"We have also decided that NR has unacceptably inconvenienced passengers and train operators as a consequence of problems with its new timetable planning system introduced earlier this year. We will now consider whether a penalty is appropriate."

NR said yesterday that figures for August 2010 showed 94.2% of trains ran on time.

Network Rail said: "We recognise the imperative of getting best value for the British people by further driving down costs. Over the past five years the company has already taken out £6 billion - or 27% - from the cost of running the rail network and has made a good start on delivering a further 21% by 2014.

"The legacy of years of under-investment meant we have started this race from well behind our European counterparts but we are fast catching up, with the ORR now measuring us against our best performing neighbours."