NETWORK Rail’s profit levels dipped slightly last year – but spending on the national rail network rose to a record £4.7 billion compared with £4 billion the year before.

Preliminary results for the year ending 31 March 2009 show that the infrastructure company had a profit before tax of £1.524 billion compared with £1.597 billion the previous year.

Profit after tax dropped to £609 million from £1.2 billion mainly due to an increase in a deferred tax charge.

But the profits – which will be ploughed back in to the railway – came against a background of rising debt levels, up to £22.3 billion from the previous level of £19.7 billion as the company borrowed more money to finance its spending on track and signalling.

Other income comes from track access fees paid by train companies and government grants.

The value of the pensions fund also dipped substantially, by 25 per cent, from £2.96 billion to £2.21 billion, while the company’s share of pension fund deficit increased from £370 million to £664 million.

The pension costs for the year were £135 million, up from £107 million in 2007/8, while the pension deficit, comparing assets to liabilities, is now 33 per cent, up from 17 per cent last year.

Meanwhile, the company says that it is getting more efficient in the way in which it works with 4.0 per cent efficiency gains delivered over the year, saving £360 million from the cost of running the railway.

But this is less than hoped for with the company failing to meet efficiency targets because of time taken for track renewals
The company says that £1.7 billion has been cut from the costs of running the network over the last five years with a 27 per cent efficiency delivered since 2003/4, short of the 31 per cent target set by the Office of Rail Regulation (ORR).

The report is publishes against a background of improving train punctuality – the number of trains arriving on time.
A total of 90.6 per cent of trains arrived on time over the 12 months of 2008/9.

Network Rail says that this is the first time in the history of Britain's railways that the benchmark of 90 per cent of trains on time has been reached over the course of a year, although white collar union TSSA disputed the figures claiming that figures were as good in British Rail days when InterCity achieved 92 per cent punctuality and the old Southern Region – the biggest – regularly reported 95 per cent punctuality.

Network Rail says the new performance figure compares with 78.6 per cent of trains running right time when the company became infrastructure operator in October 2002, taking over from Railtrack which went into administration.

Delays caused by track and signalling problems and other infrastructure issues were cut by 600,000 minutes over the last year, a 6.3 per cent reduction to 8.9 million down from 9.5 million – the lowest level for over a decade and beating the Office of Rail Regulation (ORR) target
Unveiling the results, chief executive Iain Coucher said: "Network Rail has delivered a good set of results meeting or exceeding almost all its targets and those set by the ORR.

"Train performance is at an all-time high, the railways have never been safer to travel on, millions of pounds are being saved from the cost of running the network and billions invested to make further improvements. Our strong focus on innovation and investment to improve our operations and reduce operating costs is driving our performance.

"Network Rail has had a good year overall and there is always room for improvement. I am acutely aware that customers expect and deserve an ever- improving rail service.

“Over the next five years our service will improve again as we embark upon an ambitious £35 billion programme of work to deliver even higher levels of performance, reduce overcrowding and expand and grow the rail network.

“My vision is for a high performing railway, easy and affordable to access and comparable with the very best railways in the world."

Projects:

    * £9 billion West Coast project completed to time and within budget

    * Work started on £5.5 billion Thameslink programme that will quadruple capacity on one of London's most overcrowded routes

    * Work on £513 million redevelopment of King's Cross well under way

    * £600 million project to rebuild Birmingham New Street about to get under way