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Thursday 12 May 2005

NETWORK RAIL EMPLOYEES TO BE REWARDED FOR DELIVERING A BETTER TRAIN SERVICE

Region & Route:

National

Network Rail’s employees, from signallers to track workers to directors, will receive bonuses this year, reflecting the substantial improvements in train performance and financial efficiency they have delivered. The company’s Remuneration Committee has decided to award the bonuses following confirmation that Network Rail has beaten the tough targets set for the year by the Office of Rail Regulation. The targets align bonus payments with passengers’ interests, ensuring bonuses are only paid if passengers benefit from a better rail service. Chairman, Ian McAllister, said: “From signal box, to track depot, to Boardroom, Network Rail employees will receive bonuses this year. We have had an excellent year delivering a more reliable, punctual and cost effective railway for passengers and freight customers alike. “In the past year train delays have been reduced by 17%, significant efficiency savings have been made and the condition of the railway assets has improved markedly. It is only right that employees should share in that success. “There is no reward for failure at Network Rail, only for improvements. Our bonus scheme aligns payments with passengers’ interests and ensures employees are incentivised for delivering a better train service.” In 2004/05 Network Rail had considerable success in delivering a better train service through improving train performance, reducing costs and improving the condition of railway assets. The bonuses reflect the substantial progress Network Rail has made in the last year: ·         A 2.3 million or 17% reduction in train delays to 11.4m minutes compared to 13.7m minutes the previous year, beating the ORR target of 12.3m minutes ·         Train punctuality reaching a four-year high, rising to 83.6% on time for the year compared to 81.2% last year, and against a target of 82.8% ·         Around 600 miles of new rail laid – more than double the typical rate five years ago ·         Further safety improvements, with broken rails, signals passed at danger and significant train accidents all at lowest ever levels ·         Major progress towards the roll-out of Integrated Control Centres across the network. To date, six of Network Rail’s eight Routes benefit from integrated control delivering big reductions in delays. The remaining two Routes will be completed this year ·         The conclusion of the process to bring in-house rail maintenance activity, involving the TUPE transfer of some 15,000 employees - one of the most complex transfers in British corporate history As detailed in last year’s Annual Report, bonuses are calculated based on the targets set by the ORR at the last review. The formula measures actual company performance against three equally weighted targets.  These targets were train delay minutes attributed to Network Rail, the Asset Stewardship Index (ASI – the condition of the railway assets) and the Financial Efficiency Index (FEI – how efficient the company has been). Performance on each of these indicators was as follows: ·         Delay minutes – the target level was exceeded ·         ASI - the target level was exceeded, and the maximum target level was reached ·         FEI - the target level was exceeded The resultant total award to employees is therefore as follows:

• 55.6% of salary for Executive Directors
• Varying proportions of salary for senior managers depending on the above measures as well as performance against personalised measures
• A bonus of £1,112 for all other employees

  ___________________________________________________________ Page 2 of 3 network rail employees to BE REWARDED for delivering a better train service The company has already announced that, having exceeded the targets for the year, the bar will be raised in the future with even tougher targets set for each remaining year of the Control Period (2004/05 – 2009/10). With the new targets, Network Rail aims to deliver additional reductions in delays each year, every year for the next four years.  In total, the company intends to cut passenger delays by an extra 3.6m minutes – over and above the already demanding targets set by the Rail Regulator.