1. ITV Report

Rail delays: Are passenger payouts enough?

Southeastern Trains Photo: ITV Meridian

Train companies are under fire for failing to pass on millions of pounds of compensation they're given by Network Rail for delays.

Southeastern has been singled out as one of the worst - paying just £148,000 a year (or an average of 30p) to its half a million daily passengers.

Southern paid out £522,000, First Capital Connect, which runs services on the Brighton line, paid out 637,000. That compares with East Coast which paid £6.6m.

The TSSA transport union has discovered that Network Rail paid train companies £172 million for delays such as signal and points failures - but they only passed on £10 million to passengers.

It is thought many passengers are simply not claiming. Most companies pay fifty per cent back if trains are more than half an hour late and the full amount for more than an hour.

Under complex rules, every time a train is late because of a Network Rail problem the company has to pay an agreed sum of compensation to the train operator.

Network Rail admitted that the current system "was not perfect", but said the status quo was set at the time of privatisation and could only be changed by the Government.

It said rail companies had other costs associated with delays other than customer compensation, but admitted that there did appear to be a disparity between what customers got in compensation and what was paid out to train operating companies.

"When the system was first set up it was intended to be revenue neutral and designed to encourage Network Rail to minimise delays," said a spokesman.

"Whether that is still the case is open to question. But this is the system that we have and it is open to Government to change it."

TSSA general secretary Manuel Cortes said the current arrangement amounted to a "rigged system" where private rail firms got millions from the taxpayer.

"The fact that the publicly run East Coast line is paying out 15 times more than the average for the private operators when it comes to refunds shows that there is something seriously wrong," he said.

"If the private operators were as open and honest as East Coast, they would have paid out well over £100m rather than a miserly £10m."

Transport Minister Norman Baker suggested the Government might be open to change the system and said: "I want assurances we have the correct incentive system for train operators to force Network Rail to improve the performance of the nation's rail infrastructure."

Louise Ellman, chairman of the Transport Select Committee, said she and her fellow MPs would be examining the issue in detail. "This is of great concern to us. We are currently undertaking a report into the rail network of which this will certainly be part, but we want to ensure that the system works in the interests of the passenger rather than train companies."

A spokesman for the Association of Train Operating Companies said: "This claim demonstrates a profound misunderstanding of how the railway works. Under a system regulated by the Office of Rail Regulation, Network Rail pays money to operators for problems which cause disruption to services.

"As part of entirely separate arrangements, passenger compensation has become increasingly generous and easy to apply for. As a general principle, train companies will compensate anyone who has bought a ticket for a journey that is cancelled or substantially delayed."