Network Rail, the company that owns and operates Britain’s rail network, moved into profit in the year to March 31 for the first time since taking over the rail network in October 2002.
The company, which has no shareholders and reinvests all its profits, made pre-tax profits of £1.48bn against a loss of £232m on turnover up to £5.79bn (£3.84bn last year).
Passenger train punctuality was also at its best since October 1999, with 88.1 per cent of trains arriving on time – within five minutes of schedule for most trains and 10 minutes for long-distance – against 86.4 per cent the year before.
However, senior executives had their bonuses cut by 63 per cent as a result of February’s Grayrigg accident, when one person was killed and many others injured after a Pendolino high-speed train derailed at a faulty set of points.
The bonus for John Armitt, chief executive, who retires in July, fell to £88,740, from £240,408 the previous year.
The improvement in train punctuality was also mainly a result of reductions in the delays caused by train breakdowns and other delays attributed to train operators, rather than track faults and signal failures for which Network Rail is responsible.
Delays attributed to Network Rail remained steady at 10.5m minutes of delays – athough the company blamed this partly on a 700,000 minute increase in delays from factors it could not control, such as weather.
Ian McAllister, chairman, said the rail network’s performance had improved further in the last year as a result of work by both Network Rail and train operators.
“More trains are arriving on time than at any point over the past seven and a half years and costs continue to be driven downward,” he said.
“The rail network is also benefiting from record investment to meet the growing demands of passengers and freight users.”
Network Rail’s financial turnaround reflects the terms of a settlement struck between the company, the government and the Office of Rail Regulation in 2004, before the start of the company’s current 2004-2009 regulatory period.
The government was permitted to delay introducing a 50 per cent increase in Network Rail’s funding from April 2004 to April 2006 on condition that it provide extra funding in the remaining three years, including an element to reflect the costs of the company’ extra borrowing in earlier years. The past year was the first when the extra payments were made.
The increase in net debt also slowed sharply as a result – it was £18.4bn at the year-end, against £18.2bn the year before.