Bosses cash in at 'new Railtrack'

BOSSES at Network Rail, the Governmentbacked not-for-profit successor to Railtrack, are in line for huge bonuses that could double their salaries - simply for making the trains run on time and operating a safer railway.

John Armitt, the chief executive appointed to run 'son of Railtrack', could earn close to £1 million under the controversial scheme.

But he will have to hit yearly performance targets if he is to boost his basic annual salary of £400,000.

The scheme is bound to attract the same accusations of 'fat cat' pay that were levelled at the old Railtrack.

But Ian McAllister, chairman of Network Rail, told Financial Mail: 'This is not a fat cat business. Executives will be able to earn substantial bonuses on top of their salaries, but only if they achieve strict targets on safety, punctuality and capacity. No longer will executives be paid for just achieving certain financial targets.'

McAllister, former chairman of Ford UK, also revealed that he is looking at ways to reward 12,000 track workers. 'I am not yet able to say precisely how much people will earn because the board has still to discuss the scheme and it has to be okayed by the remuneration committee.'

But he insisted that safety and reliability are priorities. 'We have a huge backlog of maintenance and that is why we will boost spending on track maintenance by 20% over last year's £3.6bn,' he said.

Railtrack was notorious for top pay. Despite the fatal Paddington and Hatfield crashes and a dismal maintenance record, executives received large rewards based on the company's financial performance.

There was widespread outrage when former Railtrack boss Gerald Corbett received a £440,000 payoff and a further £900,000 in lieu of pension.

Armitt will take his new post at the completion of Network Rail's acquisition of Railtrack. News of McAllister's plans for executive bonuses comes just days after shareholders approved the sale of Railtrack to Network Rail.

Railtrack, created six years ago when the Tories broke up and privatised British Rail, was effectively killed off last autumn when the Labour Government pushed its operating company into administration.

Network Rail also plans to move out of Railtrack's old headquarters at Euston station in central London. 'If it is affordable I would be in favour of it,' McAllister said.