28 May 2004
Network Rail chief executive John Armitt this week claimed the economic benefit of effectively
renationalising track maintenance would be £70m per year, and dismissed claims that the much-maligned body was failing to achieve value for money.
Armitt told a meeting of the Commons' Public Accounts Committee that the decision in October to take track maintenance on the rail network back in-house had also realised immediate improvements in both the quality of work undertaken and the performance on key lines.
Asked what the impact of the move — which took private contractors such as Jarvis and Amey off the network — had been, Armitt said: 'We believe the initial savings have been £70m per year, but we're looking for more than that in the long term.'
He also said NR expected to continue to improve the way it uses its massive public cash pool — £21bn over the next five years.
He was appearing before the committee to answer questions on the National Audit Office's critical report, Network Rail: making a fresh start, which was published on May 14.
Appearing alongside him on May 26 was the chief executive of the Strategic Rail Authority, Richard Bowker, NR chair Ian McAllister and Department for Transport permanent secretary David Rowlands.
Rowlands dismissed suggestions that NR had been set up as a not-for-profit-company so that it would not contribute to the government's escalating public sector borrowing rates.
'It was driven by the idea that what we wanted was a private sector-type body that can react effectively and with efficiency,' Rowlands said.