The national railways watchdog is considering calling for an overhaul of how Network Rail is funded, after launching an investigation into the operator's poor performance last year.
In the first year of its latest 5-year funding period, Network Rail saw major projects run over budget and behind schedule, with punctuality and reliability below expectations on some routes, notably Southern, Thameslink and Scotland.
Network Rail is responsible for delivering more than £12bn of enhancements to the rail network over the CP5 period 2014-2019, but at the end of 2015-15 it had missed 30 out of its 84 planned milestones, the Office of Rail and Road has revealed.
Track renewal is 7% behind plan, signalling renewals are 63% behind schedule, and overhead line renewals are 77% behind target. There has also been disastrous disruption due to poorly planned engineering work in the capital at Victoria and London Bridge – where commuters had to jump barriers to avoid a crush as passengers were left waiting outside the station.
Michael Dugher MP,Labour’s shadow transport secretary, said the report was 'a damning indictment' of Network Rail, adding that 'what we need is a new strategic body to improve co-ordination, a real passenger voice in how our railways are run and more public control'.
Richard Price, ORR chief executive, briefed the media there may need to be an overhaul of the way Network Rail is funded after 2019, suggesting one option would be to hand government subsidies directly to train operators whose revenues are tied more closely to passenger experience.
He told journalists this could include raising track access charges for private operators, which are 20-25% of what they would be if they reflected Network Rail’s true costs.
He also said another option could include more devolution, with eight separate regional administrations set up to help deliver local efficiency. Under the current system there were ‘questions about Network Rail’s ability to deliver projects on time’, he said.
In a statement Mr Price said: ‘Network Rail has made a slow start in delivering on its enhancements and performance targets for CP5 and we have asked it to demonstrate how it plans to get back on schedule to deliver on its commitments to 2019. The company is also falling short of its own targets on completing renewals works for the upkeep of the rail network. While there is good performance on the East Coast Mainline and the freight sector, overall reliability on some routes such as the Southern, Thameslink and Scotland routes are below requirements.
‘ORR is investigating Network Rail's performance improvement plans and delivery of enhancements. This work will help identify the issues the company needs to address to improve train performance, increase capacity and deliver on its commitments to passengers.’
He highlighted this had come at a time of ‘sustained investment and a record rise in passenger numbers as well as freight activity in recent years’, adding that the industry as a whole has improved ‘reliability of the network and services over the past decade’.
Rail expert and Labour Party London mayoral hopeful, Christian Wolmar, told Transport Network he agreed with handing government money directly to operators to reflect and encourage better performance. It would create ‘a direct relationship with passengers’ and ‘a straightforward and coherent business relationship’ he said.
He added the current system was ‘daft’ and that he had been campaigning against it for at least 15 years, arguing it is a ‘crazy way to fund railways’. He said the block grant given to Network Rail is ‘allegedly because it is investment not revenue, which is pretty tenuous’.
Mr Wolmar vowed that if elected as London mayor he would do his best to expand the control of Transport for London (TfL) to various southern lines to help improve services, stations and staffing numbers, pointing to the recent take over of West Anglia services by TfL as proving to be a success already.
Network Rail also saw its debt rise from £33bn to £37.8bn over the last financial year as it borrowed to improve stations. The not-for profit company was reclassified as a public body last year, shifting its debt on to the public books.