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Rail Professional opinion Katie Silvester, editor Now for the bonus question… So the Network Rail board has bowed to pressure to waive its bonuses – following the outcry over bankers’ bonuses and unfavourable press coverage about its own bonuses – and the six executives have donated the money to a safety fund instead (see page 6). It’s not the first time that Network Rail executives’ bonuses have received media attention. In fact it happens most years. The previous Network Rail CEO, Iain Coucher, waived part of his bonus to avoid criticism 12 months ago. But this year’s bonuses got even more widespread comment than in previous years, coming so soon after Network Rail’s admission of guilt over the Elsenham level crossing deaths, and right on top of the furore of the Royal Bank of Scotland’s bonuses, which RBS CEO Stephen Hester also turned down in the face of strong public pressure. Surely it must be time for a different approach. It just makes no sense to structure a senior executive’s remuneration package as part salary and part bonus and then, each year, when the bonus is due, make the executives in question feel so bad about taking what they are entitled to that they feel obliged to turn it down. This is more or less what the Conservatives did – transport secretary Justine Greening said very publicly that she didn’t want to see the Network Rail board take up their bonuses, and that she would use her vote as a Network Rail member to vote against the proposed bonuses. But David Higgins – who, as CEO of Network Rail, was due the biggest bonus and, therefore, came under most pressure to refuse it – was appointed to his post after the coalition government came to power. So Greening is effectively saying: ‘OK, we structured your remuneration package to be part salary and part bonus in the first place, but we did so with the intention of pressurising you to turn down part of it each year, no matter how good or bad performance was.’ The Elsenham level crossing tragedy, don’t forget, happened years before David Higgins joined Network Rail, so he was in no way personally culpable. So why structure Network Rail’s executives’ remuneration packages in this way in the first place When Network Rail was first incorporated, a bonus-style remuneration system was written into its statues, as it was thought to be consistent with the civil service where senior staff often receive bonuses, as well as echoing salary structures popular in private sector engineering companies. But in recent years, and particularly when the country is in recession, the public – fuelled by the press – has come to see senior executives as greedy if they take their bonuses, particularly if they work in an industry that receives public money. So let’s avoid the annual witch hunt and restructure the Network Rail executives’ remuneration packages so that they do not include a bonus, just a straight salary. Of course, many will still baulk at their salaries – David Higgins gets a salary of £560,000 before bonuses are even taken into account. He would have been due to receive up to 60 per cent of this again, as an annual bonus. The bonus structure also gives the board long-term incentives, which, combined with the annual bonus, would have effectively let Higgins double his salary over five years, if he received the full whack. If Higgins got a salary of £1m a year, plenty would still think that too high. Maybe there is a middle ground, but that should have been squared before he started in his role, not publicly dissected every year when the bonuses come around. News in brief Signalling apprentices sought Sims, a signalling specialist, is searching for two new apprentices in its bid to attract young people to the industry. The scheme will combine classroom learning with on-the-job mentoring. The closing date for applicants is Saturday 31 March. Olympic negotiations continue The RMT has rejected a £500 bonus for Tube workers during the Olympics. However, the union and TfL have reached an agreement worth £2,500 for DLR staff working through the Olympics and Paralympics. That deal comprises a £900 attendance bonus, paid at £100 per week over nine weeks for all grades. Golfers invited to enter charity tournament Amateur golfers are being sought for the Railway Benefit Fund’s Annual Golf Day on Thursday 7 June. Teams of four rail industry golfers will compete for the Barlow Cup at Hendon Golf Club in north London, paying £550 to enter. Contact David Allen at davidallen56bc@yahoo.co.uk Conductors sacked over passenger fight The RMT in Scotland is balloting for strike action over the dismissal of two ticket examiners. The union claims the pair were defending themselves from a gang which had subjected them to violence and intimidation over two years. ScotRail has stood by its decision to dismiss them for gross misconduct. Green vehicles get parking discount Drivers of low-emission vehicles are paying reduced parking charges in station car parks following the launch of a scheme by First Capital Connect. Drivers are given a 10 per cent discount when they purchase a season ticket with RingGo, FCC’s mobile payment system. Page 4 March 2012
SWT and Network Rail discuss ‘deep alliance’ for joint working by Paul Clifton Network Rail is in talks with Stagecoach to form a joint management team for the South West Trains franchise and Wessex Region. It is seen as the biggest step towards a single organisation running track and trains since British Rail was privatised and the two roles separated. Network Rail calls it a ‘deep alliance’. It could see a single team in place by the summer. Any agreement would have to be approved by both the Department for Transport and the rail regulator. In theory, it could see SWT boss Tim Shoveller having overall responsibility for maintenance and operational work currently carried out by Network Rail’s Wessex Region. But both Network Rail and SWT stress that no decisions about individual roles have yet been taken. It would require the agreement of other train operators that use the routes from Weymouth, Exeter, Reading and Portsmouth to Waterloo. These include FGW, Southern, CrossCountry, Freightliner and DB Schenker. Each would need to be convinced that the new management would not show favouritism to SWT. Network Rail and South West Trains staff would remain with their present employers, with the same terms and conditions. Network Rail is currently planning to build a ‘campus’ regional headquarters near Basingstoke station, from where 3,000 staff across Wessex would be managed. A South West Trains spokesman said: ‘Our joint proposals have the potential to deliver faster and more customer-focused decisions, give better value for money to taxpayers and create a more efficient railway for the long term. We are also in contact with a range of industry stakeholders, including other operators, about how any potential alliance may operate.’ Network Rail plans alliances with at least five other train operators, although these would be less close than with SWT. Framework agreements are being made with Abellio Greater Anglia, C2C, First ScotRail, Northern and Southeastern. Network Rail anticipates further alliances as part of refranchising. The Office of Rail Regulation has ordered Network Rail to work with train operators to recover long distance passenger and freight train performance. Northern Rail and Network Rail have already signed a framework agreement for an alliance, but little detail of how this will work is available yet. Ian Bevan, MD of Northern Rail, said: ‘We operate 2,500 services every day with a network spanning three Network Rail routes and interfacing with 11 other train operators. This presents its own unique challenges when considering the context in which an alliance will work.’ £500m of money returned to Treasury after DfT underspend The Department for Transport underspent by £500m in its 2010-11 budget, a report by the Transport Select Committee has revealed. The report points out that this is more than the estimated cost of the entire Northern Hub project. ‘We were surprised to learn that the DfT has ended up in a position where it was required to return over £500m to the Treasury,’ says the report, Counting the Cost: Financial Scrutiny of the Department for Transport 2011-12. ‘Put another way, the DfT accepted a cut to its in-year budget of £683m and then underspent on its revised budget by over £1bn.’ Louise Ellman MP, chair of the Transport Select Committee, added: ‘Although we welcome the additional investment in road and rail infrastructure projects announced in the Autumn Statement, there is still concern that the regions are not as well provided for as London and the south east.’ Campaigners press for new stations by Arthur Allan Scottish rail chiefs seeking comments on a major project in the central belt have been taken aback by a rash of calls for new stations. Network Rail extended its consultation on the £1bn Edinburgh to Glasgow Improvement Programme (EGIP) by two months because of ‘huge levels of interest’. The scheme aims to improve journey times and increase capacity on key routes, through electrification and other infrastructure improvements. But among the 450 submissions were calls from campaigners to open or reopen stations in the area. The EGIP plan foresees opening just one new station, a rail/tram interchange at Edinburgh Gateway on the city’s outskirts. ‘The response was more extensive than we expected,’ said Network Rail spokesman Owen Campbell. ‘In particular, we had around 20 suggestions for new stations. We understood there were community aspirations for stations, but we didn’t expect quite as many to come through.’ He said many people were taking the opportunity to state their case both via EGIP and through Transport Scotland’s concurrent Rail 2014 exercise, which is consulting on the future of the whole network. Proposed stations include Robroyston and Abronhill on the Cumbernauld line, and Winchburgh, Bonnybridge and Westerhill between Edinburgh and Glasgow. Another is Abbeyhill in Edinburgh, closed in 1964, which campaigner Lawrence Marshall said could be reopened as ‘a very modest add-on’ to EGIP. ‘This represents a once-in-a-generation opportunity to enhance rail facilities in this denselypopulated part of Edinburgh,’ he said. Meanwhile, fears of suburban station closures have caused alarm around Glasgow. Transport Scotland says no closures are planned, but its consultation mentions reconfiguration. n arthur.allan@railpro.co.uk Edinburgh Waverley station Shutterstock/Brendan Howard march 2012 Page 5
Page 1 and 2: MARCH 2012 ISSUE 180 £3.95 THE BUS
Page 3: Welcome ISSUE 180 MARCH 2012 Puttin
Page 7 and 8: New Brochure now available Keyline
Page 9 and 10: News SWT and Network Rail tackle pe
Page 11 and 12: Network Rail awards £1.5bn of sign
Page 13 and 14: Letters written by Aaron Gowell in
Page 15 and 16: News analysis around 40,000 jobs in
Page 17 and 18: Comment if this is as good as the s
Page 19 and 20: Interview Rail Professional intervi
Page 21 and 22: Interview ‘So I think I’ve got
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Page 27 and 28: Airport links British Airways sugge
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Page 31 and 32: Comment Stopping thieves in their t
Page 33 and 34: IRO Diary of events Irish Area For
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Page 39 and 40: ARE YOU ON TRACK FOR A SUCCESSFUL C
Page 41 and 42: Rail Business Awards Review Celebra
Page 43 and 44: Rail Business Awards 2011 Review Gr
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