Rail 633: Time for Network Rail to get its comeuppance


Network Rail produced another set of impressive sounding figures last month. Its interim (half-year) report shows that train performance has increased to under 7 per cent of trains being late and it has managed to reduce its operating costs by £140m, around 7.5 per cent.

 Its had a good press, too recently with much praise for the speed with which the temporary station in Workington was built, reconnecting the two parts of the town which had lost its road bridge to the floods. Network Rail quite understandably milked this for what it was worth with a press release which included a quote from transport minister Sadiq Khan. There were, too, further bouquets for the clever way in which the company restored a train service between Feltham and Twickenham by installing a section of temporary track after yet another bridge was damaged in a flood.

 So if Network Rail is doing so well, why are people in the industry so critical of the company? Indeed, even its own chairman has got in on the act. As Nigel Harris pointed out in the last issue, Rick Haythornthwaite called Network Rail arrogant, lacking humility and unable to get its message across. Mr Haythornthwaite’s view is certainly one that finds resonance among train operators who, anonymously of course since they are terrified of antagonising their supplier, will frequently make the same kind of comments about Network Rail.  Meanwhile suppliers are angry at the bureaucracy and the lack of transparency.

 Mr Haythornthwaite has only been in the job a few months and I suspect he has had his ear bent by numerous people in the industry. He will probably have noticed that Network Rail’s overconfidence has come to the fore in recent months over its relationship with government and possibly it is an attempt to warn its directors that they are venturing into dangerous waters.

 There have been a series of PR moves by Network Rail which appear to be deliberately out of step with government thinking. It started with the launch in August of Network Rail’s assessment of the case for a new high speed line. As I pointed out at the time, this was strange timing as it seemed to cut across the high speed initiative launched by the transport secretary, Lord Adonis, which is due to report at the end of the year. Moreover, the report itself had a cobbled together feel which suggested that it could certainly have been delayed to time in with the work being conducted by the HS2 team.

 Then there was Network Rail’s thinking on electrification. In October the company issued a press release, based on a year long study, focussing on the need to electrify the Midland Main Line between London and Sheffield. This contradicted the government’s view, announced only a few months previously  that there was not enough money to do both the Great Western and the Midland, and that the former should take priority.

 Now I happen to agree that electrification is a no brainer and that it should be carried out as quickly as possible on Britain’s main lines to bring us up to European standards. However, the tone of the press release suggests that Network Rail makes these decisions when, of course, the purse strings are held by the government. The press release included the statement ‘in July, Network Rail secured the go-ahead to electrify routes between London and Swansea, and Liverpool and Manchester’, which fails to recognise the fact that the electrification programme was brought back onto the agenda by Lord Adonis and not Network Rail.

 Then just to make sure that we realised that none of this was a coincidence, Network Rail did it again on stations. A week before the much-trailed launch of the stations review by Chris Green and Peter Hall, Network Rail launched a ‘£3.25bn five year programme’ to improve stations and announced a research project, on what passengers want, to go with it. This was a clear wind-up as it was a mere restatement of the programme in the 2009/14 control period and could have been announced at any stage.

 In fact, the timing of this announcement made it very clear that Network Rail was asserting its independence by deliberately cutting across the government’s own initiative. It is evidence of a clear ‘who runs the railways’ turf war stimulated by the feeling among top Network Rail’s top brass that the Transport Secretary, Lord Adonis has been acting like the chairman of British Railways and they don’t feel that is appropriate. ‘If he wants to change the structure so that ministers can run the railways, then that’s fine’ suggested one inside source. ‘But he doesn’t want to do that and yet he still acts as if he is running the network’.

 Indeed, it is true that Lord Adonis has at times seemed to want to run the system. He has been directly responsible for a series of initiatives, big and small – ranging from the electrification plan to replacing trains with trams on the  Watford – St Albans branch line – which only someone with a detailed knowledge of the industry would have been able to push through. Indeed, Network Rail’s much vaunted new Workington station was only made possible because Lord Adonis was prepared to write a cheque for £216,000 to pay for the train service.

 Therefore Network Rail – or most probably its chief executive Iain Coucher – is quite deliberately setting out to antagonise the minister. ‘He is no fool’ as my source suggested, ‘he knows what he is doing.’ While it is certainly impossible to quibble with the second part of that statement, one does wonder if Mr Coucher is indeed being a tad foolish, which is what elicited the Haythornthwaite comments.

 One could argue, in his favour, that it is right that Network Rail should be setting itself out to be independent from government, arguing the case for the railways in the way that British Rail might have done. However, there are ways of doing that, and opting for full-on public differences with a very dynamic and knowledgeable rail minister is probably not the best way to serve the cause of the railways.

 Sure, it is tempting for Network Rail’s directors to feel they are untouchable. The Office of Rail Regulation is shown time and again to be a toothless watchdog, hesitant to deliver the slightest rap on the knuckles to the big beast. The way that Mr Coucher shrugs off any criticism of his ridiculously inflated £1.24m wage packet certainly suggests that there is a feeling within the organisation that they are above public scrutiny and definitely impervious to any ministerial feelings. Mr Coucher’s salary pops up at the top in all the surveys of public sector wages which rightly consider Network Rail should be included since it is effectively state-owned and yet the organisation has made no attempt to try to reduce it. (Can someone please tell me who on earth needs that amount of money and how can they justify it for a job that involves no entrepreneurial risk?).

 I suspect that Mr Haythornthwaite, who has real private sector experience, has a cannier perception of the risks to Network Rail than his chief executive. Indeed, the seeds of Network Rail’s possible doom can be seen in the accounts where the effects of the huge debt mountain being accumulated by Network Rail are becoming apparent. It currently stands at £22bn and requires annual payments of just under £1bn, money that is effectively paid by rail passengers. At some stage the sheer unworkability of this arrangement will come to the notice of politicians and the governance structure of Network Rail will come under far greater scrutiny than it has recently. The railways may then suffer a long term investment drought but by then Mr Coucher will probably be ensconced with his millions counting his shekels in some tax haven.




Xmas books


I sometimes despair at the way that most railway books are so limited in scope, written for a limited audience and concentrating on technical aspects of the railway. This year, though, has been a bumper year for good railway books and I suggest the following as possible Xmas Christmas presents (apart, of course, from my own!)

 The best written and funniest is undoubtedly Matthew Engel’s tour round both the railway network and its history in just 300 pages, Eleven Minutes Late (Macmillan). Then there is the lovely Daily Telegraph anthology, Last call for the dining car (Aurum) an apposite title in this year of cuts in catering and the demise of the Orient Express.

 Another book that caught my fancy was Michael Barry’s Tales of the Permanent Way, stories from the heart of Ireland’s railways, (Andalus Press) a book which combines a brief history of the island’s railway history with first hand accounts from railway workers about their experiences. And finally there is Adrian Vaughan’s The Greatest Railway Blunder (Ian Allan), an angry account of railway privatisation which contains this gem, talking of those who thought up the new structure of the railways: ‘They remind me of nothing as much as children who decide the clock on the wall, ticking away and telling the time, would be improved if they cleaned its works. Having dismantled it, they find they are unable to restore it.’

 Let’s hope the success of these books stimulates a new railway literature, one that the industry deserves.  In the next issue, I will assess how Mystic Wolmar has done this year – and make some predictions for 2010. So if you have any thoughts, do send them to me.

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