Network Rail fails up with engineering works so the public has to pay an extra £14m in fines to the Treasury for the inconvenience of the delays....

Network Rail must pay a record £14m fine for overrunning engineering work, despite a plea to have it set aside.

The company had asked the Office of Rail Regulation (ORR) to allow it spend £14m on track improvements instead.

But the ORR said Network Rail (NR) was guilty of a "serious and continuing breach of its licence" and deserved a "financial penalty".

Passenger groups had backed NR's suggestion because the fine will be paid by the taxpayer.

Although NR is officially a private company, it has no shareholders, so is effectively a public organisation.

Source: news.bbc.co.uk

But there’s only one problem. Network Rail is, to all intents and purposes, a nationalised company (although the government doesn’t technically class it as such, or it would have to take its enormous debts onto the public balance sheet).

It’s not run for profit, and it doesn’t have any shareholders. So where exactly is this £14m – a record fine for a rail company – going to come from?

The only possible answer is that either the government hands over £14m of taxpayers’ money to pay the fine (which would basically amount to robbing Peter to pay Paul), or the money is taken from the pot that Network Rail is using to upgrade the railways.

And as punishments go, this seems a bit self-defeating – how is it going to do an under-invested rail network any good if the Chancellor confiscates £14m from the network operator for the Treasury coffers?

Source: managementtoday.co.uk

Gerry Doherty, leader of rail union TSSA, said: “This is a Whitehall farce. We are seeing a merry-go-round of taxpayers’ money which does not directly hit anybody at the top of Network Rail.

“I would rather see the top directors lose their annual bonus for failing to provide a proper service for hundreds of thousands of passengers during the most important family holiday of the year.

“Hitting them in their wallets will have much more impact on management than taxpayers’ money being used to pay a fine for a company funded directly by the taxpayer.”

Source: telegraph.co.uk

Norman Baker, the Liberal Democrat Transport spokesman, said: "This sounds like a huge fine, but it is a pointless one.

All it means is Network Rail will have £14 million less to invest in railways, and the Chancellor £14 million more in his coffers.

This is actually bad news for passengers.“ He added that the only sensible option was to penalise directors through their bonuses.

Source: business.timesonline.co.uk

Sir Nicholas Winterton (Macclesfield) (Con): Would it not be far better to say that Network Rail should not make any bonus payments to its management, who have shown gross incompetence?

Mrs. Villiers: My hon. Friend anticipates what I was about to say. We must remember that the problems were not caused by storms, snowfalls or sudden natural disasters, but simply by poor planning and project management at Network Rail and, indirectly, by the Government’s failure to put adequate systems in place to ensure that Network Rail is properly accountable for its performance.

Source: publications.parliament.uk