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Rail contractors face hefty fines for Christmas chaos

The contractors involved in the Christmas rail disruption around London’s main line stations may receive large financial penalties, Network Rail’s chief executive Mark Carne has warned.

Carne was speaking before the House of Commons transport select committee today (14 January). It had who demanded a meeting with him after overrunning engineering works caused massive disruption during the Christmas holiday period.

Amey, which was working in an alliance with Network Rail near King’s Cross, could lose 25% of its “annual prize”, said Carne.

The problems at Holloway in north London led to Finsbury Park station being turned into an emergency terminus for the East Coast Main Line, with huge passenger congestion in the streets outside.

The Balfour Beatty-Alstom consortium, Signalling Solutions, which was working near Paddington, could be fined £200,000, Carne told MPs on the committee.

In its official investigation, Network Rail blamed problems in west London on the signalling contractor’s failure to test equipment and file paperwork correctly.

“It was absolutely possible to execute this project the way it was planned, but the way it was organised was at fault,” said Carne.

He added that Network Rail has since asked two rival contractors to work alongside the Balfour-Alstom team to “improve work practices”.

Asked if Network Rail had tried to do too much over the Christmas period, Carne replied “no”, adding that 99% of projects had been completed on time despite it being the operator’s biggest ever programme of works at that time of year.

“We could stretch the work out over the year, but would that disrupt passengers more?” he said. “We are trying to get more efficient at what we are doing, and we will learn from this experience.”

Carne also revealed the incentive structure for his bonus, which he has given up for this financial year. “I can achieve a maximum of 20% of my salary, depending on performance,” he explained.

“If we hit our target, I get 10% of my salary as bonus. As we are not going to hit target, I am foregoing the bonus.”

Rail watchdog report due out in February

The Office of the Rail Regulator (ORR) will publish its own report into the Christmas rail chaos around London towards the end of February.

ORR director of railway markets Joanna Whittington, told the House of Commons transport select committee the report would initially be presented to the ORR board by 30 January to help it assess whether Network Rail had broken the terms of its licence.

Whittington said “a fine was the common penalty in the regulated sector”, but the ORR may instead consider ordering the rail operator to take specific actions, for example, improving its contingency planning.

Previously, following major disruptions, Network Rail has been fined £2.4M (2007), £14.7M (2008), and £3M (2010).

The maximum fine the ORR can impose is 10% of turnover.




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