News ORR ‘needs teeth’ say MPs
between Network Rail, the regulator and their advisors appears to us to be too cosy, with some companies hired by the regulator to provide an independent view of Network Rail, also providing advice to them. We question whether this serves the interest of independent review.’ The committee would like to see
Network Rail held more accountable for its use of public money – in 2009-10, it received £3.7bn in direct taxpayer support.
The comptroller and auditor
Too cosy? Anna Walker, chair of the ORR and Rick Haythornthwaite, chair of Network Rail
by Katie Silvester
The Offi ce of Rail Regulation should not be fi ning Network Rail for under-performance, a report by the Committee of Public Accounts has found, but should be enforcing a stronger link between performance and bonus payments.
The report is critical of the ORR,
accusing it and its advisors of being ‘too cosy’ with Network Rail. Margaret Hodge MP, chair of
the Committee of Public Accounts, said: ‘We doubt whether the Offi ce of Rail Regulation can put effective pressure on Network Rail to improve its performance.
‘Fines simply reduce the amount
of investment in the railways. Britain needs a regulator with teeth, who can ensure proper value for money
for both the taxpayer and fare-payer. ‘Our railways cost up to 40 per cent more than our European equivalent operators. Everybody needs to focus on improving the effi ciency of British railways.’ Network Rail does not face
normal commercial pressures from shareholders or lenders to improve its effi ciency, so the ORR’s job is to hold Network Rail to account for its performance and to incentivise it to become more effi cient. The report says: ‘We were particularly concerned that the regulator did not enforce a stronger link between performance and bonus payments to Network Rail’s senior managers, leading to excessive bonus and performance payments being paid to senior executives.’ It continues: ‘The relationship
Runaway excavator blamed on human error and design issues
Human error and design fl aws were responsible for a rail accident involving a runaway excavator, which left an operator seriously injured, the Rail Accident Investigation Branch has found. The accident happened last July near Inverness, when a machine operator was placing a road-rail excavator onto the railway. Staff on site were unable to stop the machine when it began to run down the track with the operator on board. It collided at a speed of 40 to 50mph with a stationary freight train. The operator was thrown from the cab and suffered serious injury. The RAIB found the excavator brakes had not been applied when it was being placed on the track. Recommending a review of safety and training, it blamed a combination of operator error and a failure of the machine’s control system. Network Rail has suspended use of the type of excavator involved, pending modifi cations.
general, the committee says, should have full access to Network Rail, so that parliament can scrutinise its value for money. Anna Walker, chair of the ORR said: ‘The ORR has been successful in challenging Network Rail to reduce its costs and to deliver signifi cant effi ciency savings of £15bn over a 10-year period. This is in sharp contrast to other parts of the rail industry that we do not regulate where costs have remained far too high.
‘We regulate Network Rail using a wide range of levers to drive up performance, effi ciency and safety – fi nes are rarely used and only as a last resort.’ Tony Berkeley, Rail Freight Group chairman, said: ‘We fully support the regulator holding Network Rail to account on cost reduction.’ He added that new chief executive Richard Price ‘must also grasp the nettle of an incentive scheme that rewards success rather than failure.’
n See Regulator’s platform, page 32, for Richard Price’s comments on the the ORR’s periodic review
‘Our railways cost up to 40 per cent more than our European equivalent operators’
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AUGUST 2011 PAGE 7
Meet us on Stand C41
Railtex 14–16 June
Earls Court, London 2011
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