Rail chiefs' gravy train

Network Rail came under fire today over its huge profits.

The company made £407million last year despite one in four London trains running late.

Unions say it is due to a huge increase in the amount of money Network Rail has received from the taxpayer.

Figures for the company, where directors were awarded £1 million of bonuses last year, show its subsidy has increased by more than 350 per cent from £452 million to £2billion.

Network Rail is today accused of presiding over a "cost explosion" that could only be controlled by returning the industry to full public ownership.

Passenger groups said the company's performance was not good enough. Anthony Smith, the Rail Passenger Council's national director, said: "Passengers' main priority is a safe, reliable train service. Millions of journeys are still being disrupted every year."

Keith Norman of the rail union Aslef said: "It's all very well for Network Rail to claim a profit, but this is only because of the huge amounts of public subsidy being ploughed into it." He said the railway system is still run like a "magic roundabout" with private owners chasing revenues that derive from public subsidy or charges to passengers and freight users.

He said: "Bringing NR back into the public sector was the first step. Let us go the whole mile and take private profit out of the system to run the whole railway as a single, publicly owned and accountable entity."

However, Network Rail claimed that its "financial rigour" has helped turn last year's £758 million operating loss into a £407 million profit in the 12 months to the end of March. It also reported major reductions in the number of broken rails and trains passing through red lights.

The figure of £407 million is the operating profit before Network Rail paid the interest on its £15.6 billion debt. After servicing the debt Network Rail is in the red with losses of £164 million down from the £1billion loss the previous year. The "significant improvement in our financial results" claimed by Network Rail chairman Ian McAllister came after the 350 per cent increase in the direct grants from the Department for Transport which swelled the group's turnover from £2.6 billion to £3.8 billion in the year. Network Rail earlier this month revealed bonus windfalls for its bosses which saw chief executive John Armitt's pay soar to £755,000 when workers bonuses averaged £1,100. The company said bonuses were based on improvements in train reliability.