NR’s fines could come from man­agers’ bonuses - ORR

Rail (UK) - - News -

Rail reg­u­la­tors plan to change the way they hold Net­work Rail to ac­count, to levy fines that can be paid from man­agers’ bonus funds.

The Of­fice of Rail and Road (ORR) ex­plained that it wanted to cre­ate an ex­pec­ta­tion that se­nior man­agers should bear per­sonal re­spon­si­bil­ity for any prob­lems. It said the change would mean that fines no longer de­prived the com­pany of money that could fund the net­work’s op­er­a­tions, main­te­nance and re­newals.

How­ever, ORR noted that it has no role in set­ting NR bonuses, so said that it would levy penal­ties at a size ca­pa­ble of be­ing fi­nanced from bonuses and then let NR and its owner (the De­part­ment for Trans­port) de­cide where to take the money from.

The pro­posed changes come as the ORR pre­pares for Net­work Rail’s next five-year con­trol pe­riod that starts next April, and for which ORR an­nounced fund­ing of £34.7 bil­lion in Oc­to­ber ( RAIL 865).

ORR Rail­way Plan­ning and Per­for­mance Di­rec­tor Gra­ham Richards said: “Our new ap­proach puts pas­sen­gers and other rail­way users firmly at the cen­tre of con­cerns while plac­ing strong em­pha­sis on Net­work Rail work­ing to­gether with its cus­tomers to solve prob­lems early.

“Pas­sen­gers, busi­ness and the en­tire rail in­dus­try need Net­work Rail to de­liver a high-qual­ity ser­vice. Re­solv­ing is­sues early is im­por­tant.”

ORR is now con­sult­ing rail­way stake­hold­ers about the form that fu­ture NR as­sess­ment should take. It is ask­ing for views on its plans to pay par­tic­u­lar at­ten­tion to the tar­gets NR has agreed with its cus­tomers, but also mon­i­tor the other mea­sures on NR’s score­cards as well as the com­pany’s fi­nan­cial per­for­mance and ef­fi­ciency.

In its 38-page con­sul­ta­tion doc­u­ment, ORR says it will mon­i­tor NR’s routes and its Sys­tem Op­er­a­tor func­tion by look­ing at six ar­eas: NR’s ab­so­lute per­for­mance against com­mit­ments; ORR’s con­fi­dence in cus­tomers’ and stake­hold­ers’ abil­ity to hold NR to ac­count; NR’s rel­a­tive per­for­mance against its busi­ness units; per­for­mance trends and tra­jec­to­ries; lead­ing in­di­ca­tors of fu­ture per­for­mance; and the strength of NR’s gov­er­nance and as­sur­ance ar­range­ments to help man­age risk.

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