Bonuses as Network Rail gets £1.6bn

A £1.6bn cash injection from the taxpayer is funding the financial turnaround at Network Rail that saw bosses at the track operator scoop almost £1m in bonuses and handouts of an extra 55% on their basic pay.

Network Rail today reported losses for the year to 31 March of £164m, down from £1bn the previous year with soaring borrowing costs on its £15.6bn debt mountain keeping the State-backed company in the red.

But the 'significant improvement in our financial results' claimed by chairman Ian McAllister comes after a 350% increase in the direct grants from the Department for Transport, which swelled the group's turnover from £2.6bn to £3.8bn in the year.

Deputy chief executive Iain Coucher claimed the transfer of 15,000 private company maintenance contracts into Network Rail had last year brought in £123m of savings. But Network Rail's figures show that underlying employee and external charges costs remained flat at £3bn.

Network Rail earlier this month revealed bonus windfalls for its bosses that saw chief executive John Armitt's pay soar to £755,000 when workers' bonuses averaged only £1,100. The company said that was based on reliability improvements which saw 16.4% trains running late.