Network Rail hands £1.4m bonus bonanza to bosses who presided over delays fiasco

By Ray Massey for the Daily Mail
Updated: 15:45 EST, 6 June 2008

Network Rail has awarded nearly £1.4million in bonuses to the three executives who oversaw the New Year engineering fiasco which cost the company £14million in fines.

The payouts to chief executive Iain Coucher and directors Peter Henderson and Ron Henderson were made despite a stinging rebuke to the company from the rail regulator.

The rewards are part of a £55million 'bonus pot', with all 35,000 Network Rail employees getting at least £871 each.

Fiasco: Deserted platforms at London's Liverpool Street Station during its closure when New Year works over-ran

Liberal Democrat transport spokesman Norman Baker said: 'This looks suspiciously like a reward for failure.'

Network Rail was fined £14million by the Office of Rail Regulation over its New Year engineering work on the West Coast Mainline.

The late finish of track maintenance near Rugby and at Liverpool Street station in London caused chaos for festive rail travellers.

A spokesman said Network Rail had taken its failings into account  -  by denying executives an extra £150,000 in bonuses.

The maintenance contractor is a nationalised company in all but name and receives more than £ 3billion a year from the taxpayer. This year it made a £1.2billion profit.

Between them, its three top directors received performance-related bonuses of £833,916.

'Long-term' bonuses added another £511,000  -  taking the total for the trio to £1.35million.

Mr Coucher received two bonuses of £305,581 and £205,000 on top of his £539,000 salary  -  so he took home more than £1million in total. Infrastructure director Peter Henderson had a performance bonus of £219,391 on top of a £399,000 salary  -  plus a £153,000 long-term bonus  -  making a total package of £761,391.

Finance Director Ron Henderson (left) and Network Rail's chief executive Iain Coucher were given some of the £55m bonus pot

Finance director Ron Henderson had a performance bonus of £208,944 on top of a salary of £385,000  -  plus a long-term bonus of £153,000  -  some £746,944 in total.

Former Network Rail chief executive John Armitt, who is now chairman of the Olympic Delivery Authority, also got a £178,000 bonus.

The size of the executives' payouts has led to demands that the directors 'do the decent thing' and hand back them back.

Tory transport spokesman Theresa Villiers led calls for the rail watchdog to be given the power to confiscate the cash.

'This is a taxpayer-funded company and it is simply not acceptable for the huge failure at New Year to be rewarded,' she said.

'BA's Willie Walsh did the decent thing and handed back his bonus because of the T5 disaster  -  and yet Network Rail happily doles out hundreds of thousands of pounds to its management.'

The payout comes as members of the RMT transport union announced they are to stage a weekend strike starting on June 14 in a row over jobs and conditions.

General secretary Bob Crow said: 'It is Network Rail bosses who have caused this dispute and who presided over last Christmas's massive mess, so why haven't they withheld their own fat bonuses?'

Gerry Doherty, general secretary of transport union TSSA, said that Mr Coucher should donate his bonus to charity.

'Passengers will simply not understand why he is being rewarded for failure on this scale after all they have suffered,' he added.

But Network Rail chairman Sir Ian McAllister, who does not receive bonuses, said: 'Every single employee at Network Rail has paid a price for the over-runs at New Year. Lessons have been learned.'

The rail regulator has made clear that it is is alarmed at the bonus culture at Network Rail.

It warned that future payouts may be curbed.

Network Rail was created after former Labour Transport Secretary Stephen Byers forced its private sector predecessor, Railtrack, into administration in 2001.