In fining government's own arms-length infraco, the Office of Rail Regulators (ORR) said that the amound it had to pay must reflect the serious nature of the disruption, with the knock-on effect felt by passengers and freight operators, and should also act as a wake-up call to the company that it should take urgent action to improve its approach to managing engineering possessions.
It has been widely reported that, as justified as the fine is, the money generated will not be ploughed back into the rail industry via the government, but used to booster the Treasury's coffers; the £14 million is also understood the thus reduce the money Network Rail has to spend on maintaining and improving the rail network.
The fine follows a report by the ORR into Network Rail’s management of engineering projects over the Christmas and New Year period, including the overruns at Rugby, Liverpool Street station and Shields Junction.
Bill Emery, ORR chief executive, said: “What happened over the New Year was totally unacceptable for passengers and freight customers, and to train operating companies. The weakness in Network Rail’s management of these projects had a serious impact on all of them and on the reputation of the railway. It is quite clear from our thorough investigation that Network Rail is failing to manage major engineering work as consistently well as it should. This is due particularly to weaknesses in the company’s planning, risk assessment and site management of projects as well as to failures of communication within the company and with train operators. We have published a draft Order directing them to address these failings and thus reduce the risk of similar events in the future."
The fine was based most on the failings at Rugby, which left commuters without any rail services for the first two working days of 2008. Here, the ORR admitted that Network Rail had good planning and project management processes in place but failed to ensure that site management was adequate. This meant that at key times it was unaware of the extent of the problems on the ground, unable to minimise their impact and unable to provide reliable information to passengers and train operators.
Responding to the ORR's announcement Network Rail's chief executive Iain Coucher, said: “We are clear that the ORR has said that what happened at the New Year cannot happen again. We agree and accept the findings in the report. We will make changes in the way we plan and manage future work on the railways. We have already made changes and the action we have taken since the New Year to bring in more specialist engineers and to create military-style command posts will further improve our delivery record and enable us to build a bigger, better railway that passengers and freight users deserve.
We are now focused on delivering our improvement programme for Easter and have already begun informing passengers about the works taking place. We will work with the train operating companies and National Rail Enquiries over the next few weeks to get the message out so passengers will be able to check their journeys before they travel. Clearly the fine is very significant. We will now be making representations to the ORR that this money should be used to deliver additional and concrete benefits for passengers."
Network Rail plan to spend £75 million over the long weekend break over Easter, which will see works take place again on the West Coast Main Line - including work at Rugby - with other works taking place at Liverpool Street, Derby, Sheffield, Clapham Junction and the upgrade of the Calder Viaduct in Cumbria. The cost of failure in turns of an uverrun is likely to be catastrophic, though more so in Network Rail's capability rather than any potential fine being imposed. We would assume there will no delays in handing the railway network back on this forthcoming occasion!