Richard Price
that happens where there’s been a safety lapse, as it would in any other industry.’
But they’re fining the public, how is that appropriate? Taxpayers’ money that has been allocated to the railways is simply taken back and given to the Treasury.
that they are an agreed part of a senior executive’s remuneration package, not an optional extra that is only justified in an exceptionally good year. Price’s predecessor Bill Emery wrote to Network Rail on one occasion asking it to consider reducing the bonuses, following a mixed year performance wise. Are Network Rail’s bonuses still acceptable, when the public are so critical of them? ‘I think in general, in a system where senior executives in this organisation have a big influence on its performance and its costs and it really matters to the public and there’s a huge amount of public money at stake, I think it makes sense for a larger proportion of their remuneration to be at risk than not so that their reward is explicitly related to what they can achieve for customers.’ The other part of the ORR’s job is to oversee safety on the railway, since it took over the HM Railway Inspectorate, which was previously part of the Health and Safety Executive. The ORR’s safety remit is headed up by Price’s colleague Ian Prosser. ‘The recent history of the industry on safety is good,’ says Price. ‘The industry needs to make sure it’s learning lessons where things go wrong and continuously improve. The other area that Ian Prosser and his team have been working on is occupational health, around risks like driver fatigue and health risks in depots where chemicals aren’t always well managed and well documented.’ The ORR has been criticised for prosecuting
Network Rail through the courts for safety breaches. Fines to the tune of millions of pounds have been handed out to Network Rail. The problem is this – Network Rail gets its funds from the public purse, as well as from train operators via train fares and the charges that freight customers pay. So we are all, as taxpayers, paying towards that fine, as are passengers. The families of the survivors of the Potters Bar crash recognised the futility of such a system and asked that Network Rail not be fined. But in the end, it was fined £3m.
‘There are distinct regimes for safety penalties and penalties we impose in relation to performance. In relation to safety, those penalties are imposed by the courts, so they are the same as any other safety penalty and it’s right that they do that. It’s important
‘The reputations of the managers in that business are also at stake, so I think fining in those circumstances sends very important very clear signals, but it’s equally important that it focuses management’s attention on learning lessons where things have gone wrong. The most important thing is that we don’t see preventable accidents on the railway recurring. That’s absolutely the critical thing. ‘On performance penalties, like the ones we’re just signalling Network Rail may have to pay if it fails to meet its punctuality commitments for next year, we are consulting at the moment whether there is another way Network Rail can be penalised which has a much more direction connection to benefits to customers. Rather than taking money out of the system, the penalty can be that Network Rail has to divert money into improvements for passengers that would not otherwise happen.’ The ORR doesn’t currently deal with Tocs. But
Price has made a bid for his organisation to take over the regulation of train operators too – he believes it would simply be a natural extension of the ORR’s current remit. The ORR already deals with open access operators, but it has been a while since any additional open access routes were approved. Hull Trains wants to expand its offering, as does Grand Central, but nothing has got the go- ahead yet. A Grand Central bid to run services from Euston to Blackpool was turned down last year on the grounds that it would take revenue away from franchised operators. A new company, Alliance Rail, has ambitious plans to bring direct rail services from London to Bradford, Rochdale and Huddersfield. But Alliance, headed by ex-Grand Central boss Ian Yeowart, has yet to get approval for any of its routes. ‘We support open access where it’s in the
interests of customers and taxpayers. Open access can bring really significant benefits, essentially tapping into latent demand out there. There are issues at the moment around capacity on the East Coast, where there are competing bids for that capacity. We have a process for considering that and weighing up the potential uses of capacity. You should not read into that, though, either that we favour one operator over another or that we are particularly against open access. In general we are in favour of open access. I can’t comment on applications that are under consideration now. Where there’s capacity we will consider bids from open access operators and franchises. We don’t discriminate.’ A year into his role, Price is clearly enjoying his
job – but feels there is a lot more to be done. ‘The scale of the transformation that’s required across the industry is colossal,’ he says. But he has already made an impact over that year – train operators are up in arms about his proposals for Tocs to be regulated by the ORR (see the Michael Roberts interview in our July issue). It remains to be seen whether Price’s bid to expand the ORR’s role will get the go-ahead from the DfT, but if it doesn’t Price is sure to have more ideas up his sleeve.
AUGUST 2012 PAGE 11
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