Network Rail is 40% less efficient than foreign firms

The "efficiency gap" between NR and the rest of Europe is said to be 34 per cent to 40 per cent, the Office of Rail Regulation (ORR) said. It was also found to have failed to meet the body's expenditure expectations in investment and running by almost 1 billion.

The carrying out of "possessions" - when NR takes over the track for engineering work - is one of the areas where the company fares less well than others in Europe, the ORR said.

In March this year, NR was lambasted by the then-UK rail minister Lord Adonis after it closed both the east and west coast lines for two weekends.

Publishing international data yesterday, the ORR said: "The figures confirm NR remains significantly less efficient in maintaining and renewing its infrastructure than comparable rail infrastructure managers in Europe, with the shortfall being between 34 per cent and 40 per cent.

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"Further engineering analysis highlights key factors behind the efficiency gap, including the way track renewals contracts are awarded and the different way possessions are carried out."

ORR chief executive Bill Emery said: "As NR is a national monopoly, we benchmark the company against its international counterparts. Our work confirms that there is a significant efficiency gap. We will now compare and publish the company's efficiency against its peers annually."

The European comparison was part of the ORR's assessment of NR's finances and efficiency published yesterday which showed that NR made a 3.6 per cent efficiency improvement in its operating, maintenance and renewals work during 2009-10 compared with 2008-09.

NR must make a further 18 per cent of efficiency savings over the next four years to meet ORR-set targets.

The ORR said NR spent 6.5bn to operate and invest in the network in 2009-10, 800 million less than ORR assumed would be spent.

Mr Emery said: "Given the current economic climate, it is absolutely critical that the rail industry makes every penny count.

"Our efficiency report shows that NR is making progress towards achieving its target of at least 21 per cent efficiency savings by 2014. This is encouraging.But the company still has much to do in the remaining years of the control period to meet our expectations."

Responding to new criticisms, Network Rail said: "Over the past five years the company has already taken out 6bn - or 27 per cent - from the cost of running the rail network and has made a good start on delivering a further 21 per cent by 2014."

Anthony Smith, Passenger Focus chief executive, said: "It is in the fare-paying passengers' interests that pressure is put on the industry to reduce costs - passengers must not be expected to cover the cost of poor working practices or project management."

Tracks company facing a fine over timetable problems

Network Rail faces a fine following "avoidable" timetable problems which left some train companies unable to publish journey information or take reservations.

The Office of Rail Regulation said NR had been in breach of its licence following difficulties introducing a new timetable planning system.

The report also highlighted that the Scottish east coast main line suffered poor summer performance.