Network Rail faces penalty for poor planning

30 July 2007
ORR/22/07

The Office of Rail Regulation (ORR) has today announced its intention to impose a penalty of £2.4m on Network Rail for the weaknesses in the planning and execution of the Portsmouth resignalling scheme.

ORR concluded last month that Network Rail had breached Condition 7 of its network licence by failing adequately to evaluate and mitigate the risks associated with the project, and to manage its contractor in line with best practice. In particular, Network Rail failed to consider and plan for the possibility of an extended overrun of the commissioning works, and the consequential effect on passengers.
 
ORR Chief Executive, Bill Emery said,

“Network Rail’s planning and risk assessment of the Portsmouth resignalling project fell well short of the standard we expect. We have concluded this is a moderately serious breach affecting many passengers. Similar future breaches elsewhere on the network would have an even greater impact on passengers and train operators. We intend to impose a penalty to provide a strong incentive to Network Rail to help ensure it conducts robust risk assessments that reflect the potential impact on third parties and puts in place appropriate management and mitigation measures. We consider that a £2.4m fine is proportionate for this breach and is in line with our policy. We also consider that imposing this fine will reinforce the requirement that Network Rail must meet its commitment to apply fully the lessons it has learnt here to future decisions.”

Notes to editors:

1. The section 57C notice under the Railways Act 1993 (as amended) is available at http://www.rail-reg.gov.uk/upload/pdf/not-pmth-penalty-300707.pdf.
2. Representations on the penalty may be made within the next 21 days, by 20 August 2007.
3. ORR announced that it had found Network Rail in breach of its licence on 6 June 2007 - http://www.rail-reg.gov.uk/server/show/conwebdoc.8741.
4. Network Rail’s network licence is available on the ORR website at http://www.rail-reg.gov.uk/upload/pdf/netwrk_licence.pdf. The relevant licence condition is Condition 7 of Network Rail’s network licence which provides a duty for Network Rail to take such steps as are necessary or expedient so as to achieve the purpose of the Condition to the greatest extent reasonably practicable having regard to all relevant circumstances including the ability of Network Rail to finance its licensed activities.
   
   The purpose referred to above is:
   
   “to secure:
   (a) the operation and maintenance of the network;
   (b) the renewal and replacement of the network; and
   (c) the improvement, enhancement and development of the network,
   
   in each case in accordance with best practice and in a timely, efficient and economical manner so as to satisfy the reasonable requirements of persons providing services relating to railways and funders in respect of:
   
   (i) the quality and capability of the network; and
   (ii) the facilitation of railway service performance in respect of services for the carriage of passengers and goods by railway operating on the network.”
5. ORR’s economic enforcement policy and penalties statement is available on the ORR website at http://www.rail-reg.gov.uk/upload/pdf/287a.pdf.
   

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