Network Rail

What is Network Rail?

Network Rail (NR) was set up in 2002 to replace Railtrack as the body responsible for Britain's rail network. It holds a monopoly over Britain's rail infrastructure, a major national asset, and as such is rigorously monitored to ensure accountability to the public interest. Its network operating licence was originally issued to Railtrack on March 31st 1994.

As a result NR is limited by guarantee, which means it operates as a private company without a profit-making function. Instead of shareholders, members drawn from the rail industry and the general public hold the board to account by reviewing its performance against pre-set targets. The Department for Transport (DfT) is also a member, providing it with substantial subsidies each year.

NR's primary purpose is the maintenance of Britain's rail infrastructure, which includes tracks, stations, bridges, tunnels and signalling assets. It does not control the rolling stock of passenger and freight trains but its structure is organised according to nine major routes to aid closer relations with train and freight companies. These are Scotland, North-Eastern, North-Western, Western, Midland and Continental, Anglia, Wessex, Sussex and Kent.

The Office of Rail Regulation (ORR) is the independent safety and economic regulator for Britain's railways and its principal economic function is to regulate Network Rail's stewardship of the national rail network.

One of the ORR's key roles is to limit the charges Network Rail, as the monopoly railway infrastructure manager in Britain, can impose for access to this infrastructure.
The ORR carries out periodic reviews of charges, the last being in 2008 setting charges for the period 2009-10 to 2013-14.

During the period between reviews the ORR monitors Network Rail's expenditure and its progress in improving its efficiency, with a Network Rail monitor document published every three months.

Background

After being set up on March 25th 2002 NR assumed control of responsibility for the rail network on October 3rd of that year. Initial assessments of its inheritance were bleak; more than one-fifth of trains were not running on time, while a March 28th 2003 report bemoaned the lack of investment seen in recent years.

Initial good progress saw a seven per cent reduction in delays by March 31st 2004, while the acquirement of funding worth £22 billion over a five-year period enabled it to begin improving the network. The government rewarded NR with new responsibilities in a July 2004 White Paper, handing over monitoring and train performance reporting duties from the abolished Strategic Rail Authority. In the same month NR doubled the number of its employees by taking maintenance in-house.

NR's progress continued to be monitored by the Office of Rail Regulation (ORR), whose quarterly monitoring documents saw improvements in safety risk, delay minutes and its 'public performance measure'. Nevertheless, concerns were raised about infrastructure management issues causing problems from mid-2006 and in the quarter to September 2007 the ORR noted that the delivery of major schemes was. becoming a "major challenge".

However, the ORR's annual assessment for 2007-8 said it was "heartening to report that Network Rail has continued to improve its stewardship of the network."

In 2008-9 the ORR revised the way it monitors Network Rail with most of the areas covered in previous annual assessments, including safety risk, train performance, asset performance and planning now included in the Network Rail Q4 monitor.

The Q4 monitor for 2010 gave an overall assessment for how Network Rail had performed throughout the year and concluded that its performance had been "mixed".  The following year the annual assessment noted that Network Rail had made progress in delivering a number of major rail projects, but cautioned that some performance setbacks meant it had "big challenges ahead."

By 2012, the ORR found that Network Rail had made "real progress" in a number of areas, welcoming in particular its commitment to improve health and safety. However, it also saw a "continued excessive reliance" on ORR to force progress on specific safety and asset management issues. The ORR therefore welcomed NR's plans to improve its asset condition knowledge, management of civil structures and the handling of level crossing risk.

Controversies

The entire creation of Network Rail was controversial, declared 'privatisation in all but name' by Thatcherite critics. Labour's treatment of Railtrack and then NR appeared to vindicate the privatisation policy - even if, technically at least, the new organisation was not profit-driven.

As NR began the task of rejuvenating Britain's railways the demise of Railtrack was dragged through the headlines thanks to Stephen Byers "inadvertently" misleading MPs.

It took until October 2005 for Mr Byers to be cleared in the High Court of acting maliciously by refusing to bail Railtrack out in 2001. It was placed into administration because of financial difficulties mainly caused by the Hatfield crash of 2000. Railtrack shareholders had contended Mr Byers wilfully withheld funding from the company to force its collapse, an argument eventually dismissed in court.

Fines involving major failings have also plagued NR. It was hit by a £4 million fine in March 2007 over the fatal Paddington crash of 1999 in which 31 people died and £2.4 million in July 2007 after ORR found it had failed to plan for a resignalling scheme overrun.

Failings inconveniencing passengers hit the headlines at the beginning of 2008, when engineering works supposed to be completed before New Year's Eve over-ran to affect the first commutes of the New Year. Liberal Democrat transport spokesman Norman Baker called the delays a "fiasco" while the Conservatives called on NR to "get its act together". Network Rail was fined a record £14m following three days of delays and cancellations to January 3rd.

More recently in October 2010 the Office of Rail Regulation announced that Network Rail would face a £3m fine after it breached its licence by failing to run an effective and efficient timetabling process for the rail network. This followed the introduction of the integrated train planning system (ITPS) for the May 2010 timetable. ORR chief executive Bill Emery said: "Not for the first time, Network Rail has breached its licence for failing to give sufficient emphasis to the needs of its customers. This substantial penalty sends a very clear message that the company must quickly take steps to ensure its processes prioritise its customers."

Problems from the past also continue to haunt the company. On 10th November 2010 the ORR began criminal proceedings against Network Rail Infrastructure Limited and Jarvis Rail Limited for breaches of health and safety law which caused the Potters Bar derailment on 10th May 2002 in which seven people were killed and many more seriously injured. The infrastructure controller for the national rail network at the time was Railtrack plc (in administration) which was taken over by Network Rail Limited in October 2002. A maximum fine of £20,000 for each charge may be imposed by a magistrates court; however, if the case is committed to the Crown Court the maximum penalty is an unlimited fine.

In May 2011, St Albans Crown Court imposed a fine of £3 million on Network Rail and an order to pay costs of £150,000 following the prosecution brought by the ORR.  Network Rail was charged under section 3(1) of the Health and Safety at Work Act 1974 for a health and safety offence which caused the Potters Bar derailment.

Jarvis Rail Limited also faced a charge under section 3(1) of the HSWA.  However, the ORR decided not to proceed with the prosecution of Jarvis, stating that: "while there remained sufficient evidence to provide a realistic prospect of conviction of Jarvis, a prosecution was no longer in the public interest."

Statistics

Network Rail owns and manages 6 national stations and 11 London stations. These are:

National stations: Birmingham New Street, Edinburgh Waverley, Glasgow Central, Leeds, Liverpool Lime Street, Manchester Piccadilly.
London stations: Cannon Street, Charing Cross, Euston, Fenchurch Street, King's Cross, Liverpool Street, London Bridge, Paddington, St Pancras International, Victoria, Waterloo.

There are approximately 6,500 level crossings in Britain.

Every year 1.3 billion journeys are made on Britain’s railway and 100 million tonnes of freight is transported by rail between ports, factories and shops.

Over the next 30 years passenger demand for rail will more than double and freight demand is expected to go up by 140%.

A million more trains run every year than just five years ago.

Source: Network Rail - 2012

Quotes

"This is a time of change and real opportunity for the rail industry. The successes of the last decade have laid solid foundations. Costs have been reduced, the railway is safer and more reliable than at any time in its history, more trains are running and demand for rail grows ever higher."

Network Rail - 2012