| Type | Company limited by guarantee / State-owned company |
|---|---|
| Industry | Railway infrastructure provision |
| Founded | 2002 |
| Headquarters | London, United Kingdom |
| Key people | Rick Haythornthwaite - Non Executive Chairman David Higgins - Chief Executive[1] |
| Revenue | £6.1 billion (2009)[2] |
| Employees | 35,000[3] |
| Website | www.networkrail.co.uk |
Network Rail is the trade name used by Network Rail Ltd. (Company number 04402220 incorporated in England and Wales) and various of its subsidiary companies. The most prominent public presence is in the form of its subsidiary Network Rail Infrastructure Ltd (Company number 02904587 registered in England and Wales) which was previously named Railtrack plc..
Network Rail Ltd is a statutory corporation created as "not for dividend" private company limited by guarantee; Network Rail Infrastructure Ltd was reported in the 2010 annual company report as 100%-owned by Network Rail Ltd.
Network Rail Infrastructure Ltd is owner and operator of most of the rail infrastructure in Great Britain (England, Scotland and Wales).[4]; it is not responsible for railway infrastructure in Northern Ireland or for the majority of track used by London Underground.
Network Rail's main customers are the separate and mostly private-sector train operating companies (TOCs), responsible for passenger transport, and freight operating companies (FOCs), who provide train services on the infrastructure that the company owns and maintains. Network Rail does not itself run passenger or freight services; ultimately both Network Rail and the train operating companies have the shared responsibility of delivering train services to the travelling public.
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Britain's railway system was built by private companies, but it was nationalised by the Transport Act 1947 and run by British Railways until re-privatisation in the 1990s. Infrastructure and passenger and freight services were separated at that time. Between 1994 and 2002 the infrastructure was owned and operated by Railtrack.
The Hatfield train crash on 17 October 2000 was a defining moment in the collapse of Railtrack.[5] The immediate major repairs undertaken across the whole British rail network were estimated to have cost in the order of £580 million and Railtrack had no idea how many more 'Hatfields' were waiting to happen because it had lost considerable in-house engineering skill following the sale or closure of many of the engineering and maintenance functions of British Rail to external companies; nor did the company have any way of assessing the consequence of the speed restrictions it was ordering, which all but brought the railway network to a standstill.[6] The costs of modernising the West Coast Main Line were also spiralling.[7] In 2001, Railtrack announced that, despite making a pre-tax profits before exceptional expenses of £199m, the £733m of costs and compensation paid out over the Hatfield crash had plunged Railtrack from profit into a loss of £534m,[8] and it approached the government for funding, which it then used to pay a £137m dividend to its shareholders in May 2001.[9]
Network Rail Ltd. took over control by buying Railtrack plc, which was in "railway administration", from Railtrack Group plc for £500 million; Railtrack plc was then renamed and reconstituted as Network Rail Infrastructure Ltd. The purchase was completed on 3 October 2002.[10] As the original company had thus never ceased to exist but continued under another name, this was the reason that Network Rail Infrastructure Ltd was the defendant in later prosecutions for events which had occurred in the days of Railtrack.
Following an initial period in which Network Rail established itself and demonstrated its competence in addressing the principal challenges of improving asset condition, reducing unit costs and tackling delay, the Government's Rail Review in 2004 White Paper said that Network Rail should be given responsibility for whole-industry performance reporting, timetable development, specification of small and medium network enhancements, and the delivery of route-specific utilisation strategies (RUS).[11] Some of these are functions which Network Rail already had; others – such as the obligation to devise route utilisation strategies – were transferred to Network Rail from the Strategic Rail Authority, a non-departmental public body, part of the UK government. The SRA was subsequently abolished.
The company moved its headquarters to Kings Place, 90 York Way, from 40 Melton Street, Euston, on 26 August 2008. On 3 October 2008, Sir Ian McAllister announced that he would not stand for re-election as chairman of Network Rail. He had held the position for six years. He noted that as Network Rail moved to a "new phase in its development" it was appropriate for a new chairman to lead it there.[12]
Many track safety initiatives have been introduced in the time Network Rail has been responsible for this area. The latest, announced in December 2008, known as "All Orange", states that all track personnel must not only wear orange hi-vis waistcoats or jackets, but must also wear orange hi-vis trousers at all times when working on or near the track.
This new safety ruling came into force on 1 January 2009 for maintenance and property workers and on 1 April 2009 for infrastructure and investment sites.[13]
In 2011 the company began the process of reorganising its operational structure into nine semi-autonomous regional entities, each with their own managing director; the first two units to be created were Scotland and Wessex regions.[14][15] The re-organisation has been interpreted as a move back towards vertical integration of track and train operations.[16]
Network Rail owns the infrastructure, including the railway tracks, signals, tunnels, bridges, level crossings and most stations, but not the passenger or commercial freight rolling stock.
Although it owns over 2,500 railway stations, it manages only 18 of the biggest and busiest of them, all the other stations being managed by one or other of the various train operating companies (TOCs). Network Rail had a 15-year lease on Square One in Manchester with 800 staff in one of Manchester's largest refurbished office spaces.[17]
Network Rail should not be confused with 'National Rail'. National Rail is not an organisation, but merely a brand, used to explain and promote a Great-Britain-wide network of passenger railway services. The majority of Network Rail lines also carry freight traffic; some lines are freight only. A few lines that carry passenger traffic are not part of the National Rail network (for example High Speed 1, Heathrow Express, Tyne And Wear Metro and the London Underground). Conversely, a few National Rail services operate over track that is not part of the Network Rail network (for example where they run on London Underground track).
The current Chairman is Rick Haythornthwaite, and David Higgins is currently appointed as the Chief Executive.
Network Rail covers 20,000 miles of track, and 40,000 bridges and tunnels.[18]
In October 2003 Network Rail announced that it would take over all infrastructure maintenance work from private contractors, following concerns about the quality of work carried out by certain private firms, and spiralling costs.
February 2004 saw the opening of an operations centre at Waterloo station in London, operated jointly by Network Rail and the train operating company South West Trains. This was the first full collaboration of its kind since privatisation, and it is regarded as a model for other areas of the network, with a further six integrated Network Rail + TOC Control Centres having opened since then, at Blackfriars, Croydon (Leading Control for First Capital Connect), Swindon, Birmingham, Glasgow and, most recently, Liverpool Street and South Wales based in Cardiff Canton.
Track renewal, the ongoing modernisation of the railway network by replacing track and signalling, continues to be carried out by private engineering firms under contract. The biggest renewals project is the multi-billion-pound upgrade of the London to Glasgow West Coast Main Line, which was completed in 2008.
Network Rail initially sub-contracted much of the work and the site to private Infrastructure Maintenance Companies such as Carillion and First Engineering. Other sub-contractors are used on site for specialist work or additional labour. These include Prima Services Group, Sky Blue, Balfour Beatty, Laboursite, BCL, Atkins (Atkins Rail) and McGinleys.
Since 2003 Network Rail has been building up significant in-house engineering skills, including funding of apprenticeship and foundation degree schemes. Network Rail reports significant savings resulting from the initial transfers of work away from contracting companies. Additional contracts were taken back by Network Rail after the serious accident at Potters Bar and other accidents at Rotherham and King's Cross led Jarvis to pull out of the track repair business. Shortly after this, and due to other failures by maintenance companies, Network Rail took control of many more maintenance duties.
Telecomms maintenance came full circle in April 2009 with the bringing in house of the staff of Thales Telecom Services Ltd (formerly British Rail Telecommunications (BRT)).
In 2006, Network Rail made public a high-tech plan to combat the effects of slippery rail. This plan involves the use of satellites for tracking trouble areas, water-jetting trains and crews using railhead scrubbers, sand sticks and a substance called Natrusolve, which dissolves leaf mulch.[19]
All workers working on, near or trackside have to undergo a Personal Track Safety assessment (re-assessed every two years) Network Rail workers undergo an assessment every year as part of AITL (Assessment In The Line). The AITL requires each worker to go through questions on a computer based program on all the competencies held.
The safety record of the company has been marred by the Grayrigg derailment, when a Virgin express was derailed at Grayrigg in Cumbria on 23 February 2007. Network Rail admitted responsibility for the incident. The RAIB investigation concluded in August 2009 that a faulty set of points had caused the derailment.[20]
In September 2007 it was announced that the number of track renewal contractors will be reduced to four from the current six. These are now Amey/SECO, Balfour Beatty, Babcock First Engineering and Jarvis PLC.[21] Jarvis PLC has since gone into administration, with the bulk of its work commitments being picked up by Babcock.
Network Rail owns more than 2,500 railway stations, divided into six categories. Management and operation of most of them is carried out mostly by the principal train operating company serving that station; however, in a few cases the train operating company does not serve the station, for example Hinckley is managed but not served by East Midlands Trains.
Network Rail manages and operates 18 of the largest and busiest stations directly, including most of the main London terminal stations.[22] The London stations are London Bridge, Cannon Street, Charing Cross, Euston, Fenchurch Street, Kings Cross, Liverpool Street, Paddington, St Pancras,[23] Victoria and Waterloo. The company also operates Birmingham New Street, Edinburgh Waverley, Gatwick Airport, Glasgow Central, Leeds City, Liverpool Lime Street and Manchester Piccadilly.
Network Rail has several training and development sites around Britain. These include sites in Newcastle, Peterborough, Derby, Leeds, Watford, Walsall and Larbert which provide refresher courses, and train staff in new equipment. Advanced Apprentice Scheme trainees are trained at HMS Sultan in Gosport within the whole the first year and over seven 2 week periods (throughout their second and third year) of their apprenticeship, using a combination of Royal Navy facilities and a specially installed training centre. All courses are taught by VT Flagship (part of Babcock International).[24] Network Rail bought a residential centre from Cable and Wireless in the Westwood Business Centre near Coventry for leadership development. The company and other industry partners such as Grant Rail and Balfour Beatty, also operate a Foundation Degree in conjunction with Sheffield Hallam University.
In 2008, Network Rail piloted its first qualification in "track engineering". It has been given permission to develop courses equivalent to GCSE and A-levels.[25]
Network Rail operates various essential telecommunication circuits for signalling and electrification control systems, train radio systems, lineside communications, level crossing CCTV, station information and security systems as well as more general IT and business telephony needs. The fixed bearer network infrastructure comprises transmission systems and telephone exchanges linked by a fibre optic and copper cable network that is located mainly within trackside troughing routes on the former British Rail Telecommunications network. (It is the largest private telecoms network in the UK.)
Network Rail operates several analogue radio networks that support mobile communication applications for drivers and lineside workers which consist of base stations, antenna systems and control equipment. The National Radio Network (NRN) was developed specifically for the operational railway; it provides radio coverage for 98% of the rail network through 500 base stations and 21 radio exchanges. The Radio Electronic Token Block RETB system is based on similar technology as the NRN and ORN but provides data communication for signalling token exchange as well as voice communication.
Fixed communication at trackside is provided by telephone. These are primarily provided for signallers’ to communicate with train-crew, via telephones mounted on signal-posts, and with the public through telephones located at level crossings.
GSM-R radio systems are being introduced across Europe under EU legislation for interoperability. In the UK, Network Rail have established a stakeholders board with cross industry representation to drive the UK implementation of GSM-R to replace the National Radio Network (NRN) and Cab Secure Radio (CSR) systems currently in use.
Network Rail operates a large variety of DMUs, locomotives and rolling stock to perform safety checks and maintenance (this fleet is not be confused with the combined rolling stock assets of ATOC members who work in combination as National Rail). As well as the multiple units and locomotives detailed below Network Rail own and operate a large stock of rolling stock for particular testing duties and track maintenance. Network Rail also hire freight locomotives from DB Schenker and Freightliner among others to operate engineers trains at weekends. DRS provide a number of locomotives to power test trains around the network when Network Rail locomotives are unavailable or busy elsewhere. Drivers of Network Rail rolling stock are hired from DB Schenker.
| Class | Image | Type | Introduced | Fleet Size |
|---|---|---|---|---|
| Class 31 | Diesel Locomotive | 1957–62 | 4 | |
| Class 57 | Diesel Locomotive | 1964-65 Rebuilt: 1997–2004 |
6 | |
| Class 97 | Diesel Locomotive | 1960–65 | 4 | |
| Class 117 | Diesel Multiple Unit | 1961 | 1 | |
| Class 121 | Diesel Multiple Unit | 1960 | 7 | |
| Class 122 | Diesel Multiple Unit | 1958 | 1(in traffic) | |
| NMT | High Speed Train | 2003 (built between 1975 & 1982) |
1 | |
| MPV | Diesel Multiple Unit | 46 (some stored) | ||
| Class 950 | Diesel Multiple Unit | 1987 | 1 | |
| DBSO | Control car | 2007 (converted from BSO in 1979, and 1985-86) |
5 |
For investment projects, as opposed to routine maintenance, Network Rail has developed an eight-stage process designed to minimise and mitigate risks. This is known as the Governance for Railway Investment Projects (GRIP). The stages are as follows:
Each stage delivers an agreed set of outputs to defined quality criteria.
This has now been replaced with a standard called Governance to Railway Investment Projects (GRIP) and is manadatory for use on all Network Rail projects.
For financial and other planning purposes, Network Rail works within 5-year "Control Periods", each one beginning on 1 April and ending on 31 March to coincide with the financial reporting year. These periods were inherited from Railtrack, so that the earlier ones are retrospective, and not necessarily of 5 years duration. They are as follows:
Network Rail regularly publishes a Strategic Business Plan detailing their policies, processes and plans, as well as financial expenditure and other data. The most recent complete business plan was published in April 2007.[26] Within these plans the rail network is divided into 26 Strategic Routes, with a Route Plan for each being published annually. The Business Plan and the Route plans were updated in 2008[27] and the Route plans again in 2009.[28]
Each Route Plan covers a number of railway lines usually defined by geographical area and each route is further subdivided into Strategic Route Sections (SRS) and given an SRS number and name. The plans also detail the geography of routes, stations, major junctions, capacity constraints and other issues and provide data on freight gauge, electrification, linespeed, number of tracks, capacity and other information. The plans also detail the expected future demand and development of each route, their predicted expenditure and their maintenance and investment requirements.[29]
The Route Plans and respective areas are organised as in the table below.[28]
| Route number | Area title | Primary route | Historical line names within Route |
|---|---|---|---|
| Route 1 | Kent | London – Ashford | |
| Route 2 | Brighton Main Line and Sussex | London – Brighton | |
| Route 3 | South West Main Line | London – Southampton | |
| Route 4 | Wessex Routes | Basingstoke – Salisbury – Bradford-on-Avon | |
| Route 5 | West Anglia | London – Cambridge – Kings Lynn | Breckland Line • Ely to Peterborough Line • Fen Line • Hertford East Branch Line • Cambridge Line • Ipswich to Ely Line • Lea Valley Lines • West Anglia Main Line |
| Route 6 | North London Line and Thameside | London – Southend | Gospel Oak to Barking Line • London, Tilbury and Southend Line • North London Line |
| Route 7 | Great Eastern | London – Norwich | Bittern Line • Braintree Branch Line • Crouch Valley Line • East Suffolk Line • Felixstowe Branch Line • Gainsborough Line • Great Eastern Main Line • Mayflower Line • Romford to Upminster Line • Shenfield to Southend Line • Sunshine Coast Line • Wherry Lines |
| Route 8 | East Coast Main Line | London – Edinburgh | East Coast Main Line • Hertford Loop Line |
| Route 9 | North East Routes | Middlesbrough – Sunderland – Carlisle | |
| Route 10 | North Trans-Pennine, North and West Yorkshire | Hull – Leeds – Manchester | |
| Route 11 | South Trans-Pennine, South Yorkshire and Lincolnshire | Chesterfield – Sheffield – Grimsby | |
| Route 12 | Reading to Penzance | Reading – Penzance | |
| Route 13 | Great Western Main Line | London – Swansea, Bristol – Birmingham | |
| Route 14 | South and Central Wales and Borders | Newport – Crewe, Swansea – Milford Haven, Pembroke Dock & Fishguard Harbour | |
| Route 15 | South Wales Valleys | Cardiff – valleys | |
| Route 16 | Chilterns | London – Aylesbury | |
| Route 17 | West Midlands | Coventry – Birmingham – Wolverhampton | |
| Route 18 | West Coast Main Line | London – Glasgow | Abbey Line • Marston Vale Line • West Coast Main Line |
| Route 19 | Midland Main Line and East Midlands | London – Nottingham | |
| Route 20 | North West Urban | Liverpool – Manchester | |
| Route 21 | Merseyrail | Liverpool | |
| Route 22 | North Wales and Borders | Holyhead – Crewe | |
| Route 23 | North West Rural | Carlisle – Skipton | |
| Route 24 | East of Scotland | Glasgow – Edinburgh – Aberdeen | |
| Route 25 | Highlands | Perth – Inverness – Aberdeen | |
| Route 26 | Strathclyde and South West Scotland | Glasgow – Carstairs |
The company is accountable to a body of members through its corporate constitution,[30] to its commercial train operator customers through its contracts with them (the contracts are subject to regulatory oversight), and to the public interest through the statutory powers of the Office of Rail Regulation.[31]
Since Network Rail does not have shareholders, its members hold the Board of Directors to account for their management of the business. Members are appointed by an independent panel and serve a three-year term. They have a number of statutory rights and duties which include attending annual general meetings, receiving the Annual Report and Accounts, and approving the appointment or re-appointment of Network Rail’s directors. Members have a duty to act in the best interests of the company without personal bias. They receive no payments other than travel expenses.
Members have clearly defined and limited powers; they do not run the company. Setting the strategic direction and the day-to-day management of Network Rail is the responsibility of the company’s Board of Directors. That direction must be consistent with the regulatory jurisdiction of the Office of Rail Regulation, and with the requirements of its contracts. The Office of Rail Regulation in turn operates within the overall transport policy set by the UK Department for Transport and the Scottish Government, including as to what the Government wants the railway industry to achieve and how much money the Government is prepared to put into the industry. This means that the degree of Government influence and control over the company is higher than it was before these enlargements of the powers and role of the Government were introduced by the Railways Act 2005.
At any one time there are around 100 members in total, drawn from a wide range of industry partners and members of the public. There are two general categories of membership, industry members comprising any organisation holding a licence to operate on the railway or preferred bidder for a railway franchise, and public members who are drawn from the wider stakeholder community.
The Office of Rail Regulation monitors Network Rail's performance on a continuous basis against targets established by the regulatory authority in the most recent access charges review (2003), against obligations in the company's network licence and against forecasts in its own business plan. If performance is poor,the company will face criticism and possible enforcement action from its commercial customers (under their contracts) and from the Office of Rail Regulation (enforcing the company's network licence). It may also be criticised by its members in general meeting.
In the end of year report 2005/06, the ORR reported on train performance that: "Train Performance: Good progress has been made in improving punctuality. The Public Performance Measure (PPM) of 86.4% in the year is up from 85.5% (refreshed) at the end of the third quarter (Q3) and up from 83.6% last year."[32]
The Railway Industry Planning Group (RIPG), chaired by Network Rail, has as its purpose railway industry input into the structure and development of the national railway strategic planning processes. Its members are drawn from railway funders, operators and users, and the group meets quarterly to consider:
| Title | Person | Salary[33] | Details |
|---|---|---|---|
| Chief Executive | David Higgins | £613,000 | Iain Coucher announced on 17 June 2010 that he would be stepping down from the post. He remained in place until October 2010. Peter Henderson acted as Interim Chief Executive prior to David Higgins starting on 1 February 2011. |
| Director, Asset Management | Peter Henderson | £440,000 | |
| Group Finance Director | Patrick Butcher | £350,000 | |
| Operations & Customer Services | Robin Gisby | £330,000 | |
| Infrastructure Projects | Simon Kirby | £330,000 | |
| Planning and Regulation | Paul Plummer[34] | £310,000 |
| Title | Person | Details |
|---|---|---|
| Group Company Secretary | TBA[34] | |
| Group Director, Government and Corporate Affairs | TBA[34] | |
| Director, Safety & Compliance | Julian Lindfield[35] |
In 2001 the then Labour government denied that it had nationalised the rail network in order to prevent Railtrack's shareholders claiming, via the European Court of Human Rights, the four-year average price of Railtrack, about £10 per share. Instead, Railtrack's shareholders were given only £2.60.[36] The commentator Simon Jenkins, writing in The Times, reported that Gordon Brown's aide, (now Lady) Shriti Vadera e-mailed Stephen Byers in July 2001 asking: "Can we engineer the solution through insolvency ... and therefore avoid compensation under the Human Rights Act?"[37]
Railtrack plc was placed into railway administration under the Railways Act 1993 on 7 October 2001, following an application to the High Court by the then Transport Secretary, Stephen Byers.[38] It was reported on 23 November 2001 that a further £3.5 billion might be needed to keep the national railway network running, a sum disputed by Ernst & Young, the administrators.[39] To get Railtrack out of administration, the government had to go back to the High Court and present evidence that the company was no longer insolvent. The principal reason given by the government to the court for this assertion was the decision of the rail regulator - announced on 22 September 2002 - to carry out an interim review of the company's finances, with the potential to advance significant additional sums to the company.[40] The High Court accepted that the company was not insolvent, and the railway administration order was discharged on 2 October 2002.
There has been considerable controversy over whether Network Rail is a public-sector or a private-sector entity. Although officially a private sector organisation, the fact that its debts are underwritten by the government, and it is partially funded by the government, has led to its being described as being "nationalisation in all but name".[41] It is also claimed that the government is keen for Network Rail not to be classified as a public-sector organisation, as this would mean that the company's enormous debts (over £20 billion) would be counted as public expenditure liabilities.
The National Audit Office and the Statistics Commission both treat Network Rail Ltd as a state-owned company. The Office for National Statistics has repeatedly clashed with the National Audit Office and the Statistics Commission over whether the successor to Railtrack should be considered a private company – as the ONS believes – or included on the Government's books, as the NAO argues. The NAO says that as the Government is bearing the risk that would normally be borne by equity capital, and as it can appoint, through the SRA, a director who cannot be removed by members, Network Rail is effectively a subsidiary of the Government-controlled SRA. The Statistics Commission, set up by the Government to ensure that statistics are trustworthy, is known to question the basis of the ONS judgment that Government guarantees given to Network Rail are unlikely to be called in.[42][43]
Even though the UK Office for National Statistics insists that it is correct to have classified Network Rail as in the private sector the company is occasionally described as being in the public sector:
In 2009 it was reported that Network Rail had been accused of spending millions of pounds paying compensation to staff in cases of alleged sexual or racial discrimination.[48][49] Former chief executive Iain Coucher had also been accused of financial impropriety.[50] Whilst an internal investigation by Network Rail vetted by its auditors PricewaterhouseCoopers uncovered no evidence of wrongdoing, a further independent inquiry is to be chaired by Anthony White QC resulting from an agreement between Network Rail and the Transport Salaried Staffs' Association.[51][52]
A new national headquarters site is currently under construction in Milton Keynes, adjacent to Milton Keynes Central railway station. The four buildings on the site are planned to open in summer 2012 and to accommodate circa 3,000 people.[53]
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