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Wednesday 28 May 2003

NETWORK RAIL INFRASTRUCTURE LIMITED - PRELIMINARY RESULTS YEAR TO 31 MARCH 2003

Region & Route:

National

‘FIRST STEPS TO SUSTAINABLE IMPROVEMENT’

Announcing its preliminary results today, Network Rail’s Chairman, Ian McAllister said that these results reflect a year of significant change, major progress has been achieved but much remains to be done. He commented: “It was a year in which the first steps were taken to address the difficulties of the past.  It will take several years, but our goal is to build a rail infrastructure which will demonstrate sustainable improvement in performance at an acceptable cost to the nation.” The financial and performance highlights for 2002 / 3  (comparison with 2001 / 2) include:- ·        Exit from special Railway Administration ·        Loss before tax of £290 million compared to £295 million profit for 2001/ 2 (restated) ·        Renewals spend increased 32% at £2.5 billion from £1.9 billion ·        Maintenance spend increased by 33% at £1.2 billion from £0.9 billion ·        Temporary speed restrictions reduced by 28% at 537 from 750  ·        Broken rails reduced by 17% at 445 from 534 – lowest ever recorded ·        Signals passed at danger down 7% at 405 from 434 (severe SPADs down 14%)                      – lowest ever recorded ·        Network Rail caused train delays up 9% at 14.7 million minutes from 13.4 million ·        TPWS installed at 96% of signals, the project is on time and on budget, with the system now delivering 90% of its safety benefit -         more - Prelims – 2 The financial year began with the Company six months into Special Railway Administration and ended some six months after its acquisition by Network Rail with the publication of its business plan. Commenting on the year, Chief Executive, John Armitt said: “The last year has been one of continuous change.  At the end of it the organisation has been transformed in ownership and structure and has taken the first steps in re-organising itself to meet the challenges it faces.  These challenges are clearly identified and plans are in place to meet them.”  “Despite all this change, it was a year that saw some good performance in key areas such as reductions in broken rails, temporary speed restrictions and a decreasing number of signals passed at danger as the now widely installed new safety system, Train Protection and Warning System, takes effect.  “The year saw us begin to take dramatic steps to take greater control over the maintenance activity on our network.  The New Maintenance Programme, under which the Company will determine what work is done, where and when, has been introduced in one part of the country with the remainder to follow in the next 12 to18 months.  Furthermore in three maintenance contract areas Network Rail will undertake the maintenance itself.  One of these will be taken in-house this summer with the others to follow in 2004. “Ultimately, however, it is the reliability of the train service which is the barometer of the success of the industry and in this area we saw a setback as infrastructure caused delays rose. Clearly this was an unacceptable performance and one that gives a clear focus for the year ahead. “It’s not possible to review the year without recalling the accident at Potters Bar on 10 May 2002.  This accident underlines that a safe railway is our first priority and no one at Network Rail under-estimates the need to continue to strive to improve the safety of Britain’s railways.” - more - Prelims – 3 The Chairman concluded: “We are being realistic about the challenges we face.  Substantial growth on the network allied to a history of under investment has left us with a fragile network which is expensive to put right.  Improving performance and reducing total cost must be our focus but we must also work with our contractors to make up the significant backlog in renewals. “Sustained improvement in the performance of the rail network will take several years. However, we now have clear plans and know the direction we must take.”