Network Rail holds Annual General meeting and opens new National Centre as part of reformation of the company

Published 30th July 2012

Network Rail votes itself Bonuses and promises a rebate to the Government as it moves HQ

MILTON KEYNES - Milton Keynes is the new home for Network Rail’s (NR) new national centre with 2300 employees relocating and 700 jobs being filed locally. In historic terms, Milton Keynes has a large place in railway history as it now encompasses Wolverton, the home of the World’s oldest Railway Works having opened its doors in 1838.

The new building is known as The Quadrant:MK, and will help cut millions of pounds a year from the cost of running the railway as it brings together NR teams from across the country under one eco-friendly roof, improving the way Network Rail coordinates activities to build a bigger and better railway NR claims.

Structural Reform

The move to Milton Keynes is part of a programme of structural reform of Network Rail which has seen day-to-day control of the railway devolved to local level. The company has also created a new regional infrastructure projects business and an international projects’ consultancy.

The new HQ will provide support to the routes and regions based in places such as York, Glasgow, Cardiff and Birmingham. Using a single location will save Network Rail tens of millions of pounds a year in office rental costs, reducing the cost of railways delivering better value for money for taxpayers and fare payers alike.

They said:

David Higgins, NR chief executive, said: “The national centre is at the heart of our plans to improve the way we work and will help deliver a better and more efficient railway for passengers and freight. We’ll be bringing 3,000 people who play an integral part in the running of the railway into one location, complementing the changes we have already made to our business to bring us closer to our customers and more responsive to their needs.

"This is an exciting time for the rail industry. Over the next ten years, Britain’s rail traffic will increase by around a third, making ours the fastest growing railway in Europe. The railway is vital to Britain’s future economic success – connecting commerce and communities across the country. Our people based in Milton Keynes will play an integral part in its transformation.”

Hockey Stadium demolished to make way for

The former National Hockey Stadium was demolished to make way for the NR building which provides 400,000 sq ft of office space. It is at the forefront of new office developments in the country and is one of the most sustainable buildings in the country, with a combination of cutting-edge design and the latest environmentally-friendly features.

The building is naturally ventilated with little reliance on air conditioning, uses recycled rainwater to flush toilets and draws power and heating from the local district energy scheme.

Moving in Numbers

Occupation of The Quadrant:MK started slowly in June with just 300 people moving in and roughly the same number will be moving in every week over a three month period, with the building fully operational in September.

Unintended New Local Attraction!

The new HQ building and environs have quickly become popular with local skateboarders and unicyclists. They have taken advantage of the new paved area and security features using them as a challenge to their skills!

Dateline Milton Keynes!

October 2008: Milton Keynes named as Network Rail’s preferred location for its new national centre.

April 2009: GMW, the award-winning architects behind the redevelopment of Tower 42 (the Natwest Tower), appointed by Network Rail to design the 400,000 sq ft building.

December 2009: BAM Construction awarded pre-construction services agreement by Network Rail to assist in the second stage of the design and procurement process. Also in December, demolition of the former National Hockey Stadium began.

August 2010: Construction on site begins.

July 2012: Construction ends

Network Rail holds 2011 AGM and declares a bonus and a rebate

At the NR AGM, NR's chief executive, David Higgins, predicted that by 2014 the UK and Scottish governments will have received a rebate of around £310m as a result of the company's success at delivering substantial cost savings with high levels of safety and performance.

This sounds impressive but given the company’s debt, forecast to be hovering around £30bn by then represents just one percent rebate of this debt.

David Higgins said: "We are acutely aware of the need for us and our industry partners to reduce the costs of our railway both for the taxpayer and the fare payer. We are making good progress, whilst grappling with the continued growth in passenger and freight demand and balancing the trade-offs between cost, performance and capacity."

Reduction of accountability?

NR does not have shareholders, but Members who can question NR’s Board but with little real power. During the AGM an update was given to the company's members of the company's progress.

This included the rebate of around £250m to the Department for Transport and around £60m to Transport Scotland. The company reported a 24% drop in the number of infrastructure failures since the start of the control period (April 2009), high levels of safety (historically and compared to other countries in Europe) and high levels of punctuality with 91.6% of services meeting target (slightly behind ORR targets) in 2011/12.

Despite this gloss, the ORR has threatened NR with a Licence Breach penalty and the West Coast Main Line is a poor performing route given its recent upgrade. The Directors were awarded bonus payments of up to £300,000 each for their performance in the reporting period.

The good news is that 1.46bn passengers travelled in the year on 7.3m trains - 0.5bn more passengers on one million more trains than 10 years ago. Both records not seen since the 1920s when the network was almost twice the size it is today.

The AGM also saw its members vote to radically reform the company's governance structure to make it more effective and accountable. There was a 100% vote in favour of the new governance model that will see the membership reduced from around 100 to around 40. The wider rail industry is not convinced about this however.

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