Network Rail chief nears end of the line as pressure mounts over pay and performance
THE man in charge of Britain’s railways is under pressure in Whitehall to step down, amid frustration about the slow pace of change and criticism of his £820,000 pay package.
It is understood that the Government wants Mark Carne, the chief executive of Network Rail, to leave when there is a “natural break” in his contract this year.
His departure could be sealed as soon as the spring, according to Whitehall sources, with further months required to find and appoint a new leader to steer the railways through a crucial period of rising demand and public investment.
There is no formal process under way to identify successors, but ministers are understood to be keen to see Network Rail make a fresh start and accelerate improvements to tracks.
An insider said: “He has struggled with parts of the relationship with government.” It is understood that ten- sions have included Mr Carne’s remuneration, which is among the highest in the public sector and has provided ammunition to government critics.
Chris Grayling, the Transport Secretary has publicly criticised Network Rail for failing to improve efficiency. Mr Carne’s allies this weekend pointed out that Mr Grayling had no direct power to oust the former Shell executive. The chief executive of Network Rail is appointed by a board led by Sir Peter Hendy, the former commissioner of Transport for London. Sir Peter was travelling this weekend and could not be reached for comment. Mr Carne, 58, has led Network Rail since April 2014, although he took up the role early to oversee winter track repairs after the main line into Devon and Cornwall collapsed into the sea.
Whitehall sources paid tribute to his efforts but suggested new management could help Network Rail deliver on ambitious upgrade programmes, including integration of existing infrastructure with the HS2 line.
The Government in October agreed to boost Network Rail’s budget despite concerns over the organisation’s progress under Mr Carne.
A source commented: “He could step down with a strong record intact and allow someone to come in with fresh ideas to deliver the next stage of improvements.”
A Network Rail spokesman called Whitehall discussion of Mr Carne’s future “rumours and speculation”, and said he had no plans to step down.
It’s hard to remember a time when rail commuters were happy. Like the weather, the NHS and the bins not being emptied on time, complaining about the state of the railways tops the list of national gripes. Right now, satisfaction with the train system feels at an all-time low. Tracks, bridges and stations are horribly in need of modernisation, our crowded trains are bursting, yet rarely run on time, and commuters have just been whacked with yet another inflation-busting hike in fares.
To add insult to injury, disruption to the network is at an all-time high. Southern Rail users have suffered two years of constant delays due to industrial action. Similar examples of abysmal service exist all around the country.
Meanwhile, the bail-out of the £3bn east coast line has severely damaged the case for private ownership while reigniting calls for renationalisation. The entire system is a disgrace and in desperate need of an overhaul.
Perhaps customers will take some solace then from the news that one of the figures at the heart of this sorry state of affairs is coming under mounting pressure to step down. As we reveal this weekend, Mark Carne, boss of controversial rail operator Network Rail, could be on his way out amid growing tension with Transport Secretary Chris Grayling over its shortcomings.
Like the public and the train operators themselves, ministers are fed up with Network Rail, which took over responsibility for tracks, signalling and infrastructure from Railtrack in 2001. Its stewardship is widely seen as a disaster, its incompetence when it comes to delivering projects on time and within budget notorious.
Rail bosses despise the firm, contrasting its shortcomings with the efficiency of the London Underground, which has forged the opposite reputation: completing contracts without over-running or overspending.
But what really cements its status is that while commuters keep getting whacked by higher fares, Network Rail executives continue to top the civil servant pay league.
Carne has the biggest salary of all, a whopping £750,000, and another six Network Rail bosses make the top 10. It is this reward for failure that Grayling is understood to be losing patience with.
Still, perhaps there’s a silver lining. The Transport Secretary is desperate to reform the set-up so maybe a shake-up looms. One option is to reunite wheel and track, handing control back to the train operators.
Another is to return the company to the public markets. That seems unlikely but it would mean much greater scrutiny and accountability. Either would surely be a dramatic improvement on the current state of affairs.
‘The entire railway system is a disgrace and in desperate need of an overhaul’
Worth saving at all?
This weekend, government ministers, bankers, lawyers and turnaround experts are scrambling to pull off one of the biggest and most complicated corporate rescues of recent times: a bailout of construction giant Carillion.
It will take a miracle to save something of this scale and in so much turmoil. Debts are at £1.5bn, its pension deficit is £600m and it is sitting on more than a billion pounds of losses at last count. Meanwhile, the company’s share price has sunk to just 15p from 230p in the last year. In short, shareholders don’t think it is worth much.
The challenge for its lenders is working out whether Carillion is worth saving at all. At this critical stage, with time quickly running out, they have two options: agree to a painful and high-risk debt-for equity swap, converting piles of loans and bonds into shares that wipe out existing shareholders, effectively doubling down on a highly troubled outfit; or, having already put up £140m in rescue funds only months ago, to cut and run. This means crystallising huge losses and the likelihood of being blamed for its collapse.
As we went to press, the chances of a rescue seemed to be receding. Carillion’s banks are said to be unconvinced by its future prospects without government support. Administration, followed by a fire sale of assets, may beckon, triggering tens of thousands of job losses, and leaving some of the UK’S biggest public sector projects in disarray. Yet the real villains here are the bosses who steered it off a cliff. I understand a year ago advisers were confident that a £500m rights issue was possible. Why on earth didn’t management pursue one?
Mark Carne, the chief executive of Network Rail, is under growing pressure to quit his role, according to Whitehall sources