NETWORK Rail has reported a profit of £706 million for the half year to 30 September 2008 and the highest levels of train punctuality since records began (1992), averaging over 92% for the period.  The company also explained its position over a possible appeal to the Competition Commission about the Rail Regulator’s decision on spending plans for the next five years.

The Office of Rail Regulation (ORR) said last month Network Rail could receive £27.7 billion between 2009-14 to improve the country's railways, £2.4 billion less than NR wanted. NR now says its cannot accept the OR’s settlement — which Chief Executive Iain Coucher described as “clearly challenging” — until “two significant hurdles” are overcome.

One is for the company to obtain a debt rating to allow it to commence a stand-alone debt programme. The were also “a number of issues on which the company needs clarification from the ORR.”

A final decision on whether to trigger a reference to the Competition Commission is unlikely to be made until these matters have been resolved, said NR in a statement.

The profit of £706 million in the first half year compares with £780 million at 30 September 2007. But Capital expenditure was £2,161m compared to only £1,723m the year before.

Operating costs were £1,891m (Sep 2007: £1,764m), and income was £3,117m (Sep 2007 £2,984m).

Network Rail’s total debt was £20,490m. up from £19,743m  in March 2008.

Iain Coucher said the next six months will present two major challenges for Network Rail — responding to the ORR, and completing the final West Coast Main Line upgrade and the introducing the new timetable. 

"We have met all the major project milestones on the West Coast main line in a period of intense activity and are on track to complete the upgrade on time, a phenomenal achievement on such a complex project,” he said.

“Starting in December, commuters, long distance passengers and freight users on the West Coast will start to enjoy the benefits of our work with hundreds more trains and thousands of extra seats.

"Going forward, our twin aims are even better on time performance and increasing railway capacity so that passengers and freight users benefit from longer, more frequent trains and better stations and information."