Watchdog slates Network Rail’s efficiency
The British company is up to 40% less efficient than European counterparts
- Published in News.
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European rail operators are more efficient than Network Rail
Network Rail is “significantly less efficient” than its counterparts in Europe and must improve, the rail regulator has said.
The Office of Rail Regulation (ORR) said it had compared Network Rail with other rail infrastructure managers on the Continent and found that the British company was between 34 and 40% less efficient.
ORR chief executive Bill Emery said: “As Network Rail is a national monopoly, we benchmark the company against its international counterparts. Our work confirms that there is a significant efficiency gap. We will compare and publish the company’s efficiency against its peers annually.”
The ORR said the factors contributing to the efficiency gap included the way Network Rail awarded track renewal contracts and the way in which it carries out possessions of track. The company received £5.8 billion in income last year from the government and train operating companies but spent £6.5 billion.
Emery said: “Given the economic climate, it is critical that the rail industry makes every penny count.
“Our efficiency report shows that Network Rail is making progress towards achieving its target of at least 21% efficiency savings by 2014. This is encouraging. But the company still has much to do in the remaining years of the control period to meet our expectations.”
Network Rail made an efficiency improvement of 3.6% in its maintenance and renewal work – replacing worn-out infrastructure – last year compared with 2008-09. A further 18% improvement is due by 2013-2014, the end of the control period.
The ORR’s findings on Network Rail’s efficiency will inform Sir Roy McNulty’s rail value for money study. His recommendations are expected to be published in March next year.