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ORR sets Network Rail efficiency deadline

The Office of Rail Regulation (ORR) has given Network Rail a mixed report on it past five years. It says the track operator missed efficiency savings targets, and has ordered it to produce a plan for improving performance within the next two weeks..

“We have demanded that Network Rail produce a credible plan for improving performance on the line by the middle of this month, and failure to do so will mean that we will have to consider whether Network Rail is in breach of its licence,” said ORR chief execitive Bill Emery.

It had achieved efficiencies of some 26%, but this was short of a target of 31%.Network Rail had been in dispute with the ORR over how many efficiencies it could make in the five year regulatory period between 2009-2014. Network Rail had claimed efficiency of 13% was credible but the ORR said 21% was possible.

Network Rail eventually pledged to meet the ORR’s target.

Emery said: “Network Rail’s performance over the past year has been mixed. While it has met many of its regulatory targets, it has missed others.

Efficiency targets missed

“Most notably it has failed to make the efficiency savings expected of it over the five year period to April 2009, and has fallen short of the levels of performance passengers and the industry expect on the West Coast Main line.

“Network Rail must work harder in order to achieve greater levels of satisfaction amongst its customers the train and freight operating companies, as part of the drive to deliver a better railway for users.

“Both Network Rail and the industry have come a long way in the past five years. We now have a safer, more punctual and reliable railway. It has been charged with delivering the biggest programme of expansion in decades which will help to further improve reliability and punctuality, reduce journey times and delays caused by engineering works, and increase network capacity. Big challenges lie ahead over the next five years to help further transform the railway, and Network Rail needs to continue to raise its game to ensure this happens.

“Safety on the railway continues to improve and the risk of an accident is at its lowest level for many years. However there is no room for complacency in safety, and while there hasn’t been a fatal train accident for several years, it is simply not acceptable that three railway workers were killed last year, which is the highest number since 2005. Network Rail and the industry need to work together to achieve our target of zero workforce fatalities.”

The ORR’s report forms the basis of remuneration for Network Rail staff. Chief executive Iain Coucher has already announced he would not claim any bonus this year. The ORR was written to Network Rail’s remuneration committee saying in a statement: “In the current economic situation and given Network Rail’s mixed performance, that the company must back-up any decision on bonuses with clear evidence of the benefits that have been brought to the railway as a whole.”

In Figures

The ORR does point-out that Network Rail’s performance figures are at record levels. The public performance measure (PPM) for the period between 4 January 2009 to 31 March 2009 was 90.6% - the target figure and the highest level since the measure was introduced. In the three months before, Network Rail had beaten its target.

Safety: safety risks continue to be managed, and the level of risk to passengers from train accidents is now less than half the March 2002 level. However, there were three workforce fatalities; and level crossings continue to remain a concern - particularly misuse by members of the public.

Infrastructure reliability improved again in 2008-09, at the end of Q4 the total number of infrastructure failures was 50,866, 4.8% lower than 2007-08. This resulted in 4.5m minutes of delays in 2008-09, 6.3% less than last year.

Activity volumes: Network Rail renewed 2,532 km of plain line, beating the target of 2,489 km. But only 415 switch and crossing equivalent units were renewed, compared to 472 planned, a 12%shortfall of.

Network Rail spent 131M more (7.7%) than budget in this period, but the full year was 240M (3.3%) below.

In Scotland

In Scotland, the target of 90.6% was met, but this fell 0.9% behind the planned position, despite the winter challenges during early February. Network Rail delays to First ScotRail increased by 6% in Q4 although overall delays fell by 2.1% as the operator’s own performance and inter-operator delays improved.

Infrastructure assets: The number of incidents of track faults and broken rails increased by 20% in Q4, against a UK-wide reduction of 26% for the whole year.

Expenditure: Total expenditure in Q4 was 18m (4.6%) lower than budget and full year total expenditure was 36m (5.7%) below budget.

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