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Rail Regulator warns NR against bonuses after fatal crashes

20 August 2012

Rail regulators have warned Network Rail bosses to forego their six figure annual bonuses if they are responsible for fatal crashes on the network, the TSSA revealed today.

The ORR intervention comes less than six months after the taxpayer funded firm was fined a total of £5 million for safety failures at fatal accidents in which three people died at Elsenham in 2005 and Grayrigg in 2007.

After those deaths, two school girls died at Elsenham and an old age pensioner at Grayrigg, NR executive directors took their annual bonuses worth £2.7 million.

But the Office of Rail Regulation, in a letter revealed by the union, warns them not to do so in the fuure:

"It would be helpful, to be clear, that in the event of a catastrophic accident for which NR was culpable, no bonuses would be paid," says ORR chief executive Richard Price in his letter.

The regulator is locked in a behind the scenes row with NR over its plans to pay chief executive Sir David Higgins and five other directors a total of £18 million in annual and long term bonuses over the next three years.

Manuel Cortes, TSSA general secretary, said: "There is something morally repugnant about executives of what is in effect a publicy funded company having to be told by a regulator to forego their huge annual bonuses in the event of a fatal crash they bear responsiblity for.

"As we saw both at Elsenham and Grayrigg, under the previous regime led by Iain Coucher, senior executives seemed to be oblivious to the moral arguments against taking such tainted money.

"We believe that Sir David Higgins is trying to drive through higher ethical standards at NR but this demand for total bonuses of £18 million over the next three years is simply breathtaking and risks jeopardising all his efforts to date.

"It cannot be right for six executives in charge of a state monopoly to take home £3 million a year in bonuses while passengers pay annual inflation busting fare rises and the taxpayers subsidise the firm to the tune of £4 billion a year."

NR wants to give its top six executive annual bonuses of 30% to 60% of their annual salary. For Sir David, now on £570,000 a year, that would meaan annual bonuses of up to £340,000.

On top of that, it wants to give them a long term bonus of up to £11.7 million over the next three years which would be paid on top of salaries and annual bonuses.

The ORR boss has already warned NR that the long term bonus plan would put them in breach of their licence.

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