Network Rail fined £2million for performance obligations breach

The facts

In 2014-15, Network Rail failed to meet targets, a considerable number of which were avoidable, in Scotland and in relation to the Southern and Govia Thameslink Railway (GTR). This was the first year of the current price control period (CP5) hence the Office of Rail Regulation (ORR) investigated whether the Network Rail had done everything possible to meet its license obligations. However, the modelling of timetables had been over-optimistic whilst the possibility of hindrances to the performance targets had been underestimated.

The decision

The ORR fined Network Rail £2million for the GTR failures as a result of the fear that the targets would be missed repeatedly in upcoming years. The fine was to incentivise Network Rail to avoid missing performance targets again as well as to deter others from not complying with these obligations.

However, Network Rail was not fined for the breaches in Scotland. The ORR deemed their efforts to resolve the situation to be satisfactory since performance standards have improved recently. Additionally, the ORR was mindful of the damage to Network Rail’s reputation, which had already suffered, and was aware of the costs in relation to improving the performance delivery.