Enlarge imageBy Janet McBride
LONDON (Reuters) - The operator of the country’s crumbling railways has announced plans to cut 2,000 jobs over the next three years in a move to drive down costs without scrimping on desperately needed investment.
State-backed Network Rail, which replaced failed private operator Railtrack last year, announced it was shedding 14 percent of its workforce as it unveiled a 10-year business plan showing it would cost 54 billion pounds to keep train services on track.
The government’s rail regulator will decide in December how much funding Network Rail will receive. Ultimately, rail travellers and tax payers are likely to foot part of the bill.
Trade unions said they would fight compulsory redundancies among the 14,000-strong workforce.
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Network Rail said the job losses would contribute to 12.9 billion pounds in savings over the life of the plan.
"Over the next three years we are planning to reduce the number of people employed by about 2,000," Network Rail Chairman Ian McAllister said.
"That will largely come out of administration staff, contracting staff and so on. It is our responsibility to run the railways efficiently."
Since the once state-owned railways were broken up and sold off, the network has been blighted by fatal crashes. Train companies have struggled to turn a profit, and passengers are still carried on decrepit, decades-old trains.
On Friday, the government sacked the train company responsible for one of London’s busiest commuter lines -- French-owned Connex -- citing poor management.
The head of rail union RMT accused Network Rail of paying its executives handsomely as it laid off thousands of staff.
Network Rail, a not-for-profit firm funded by the state, train companies and bondholders, stepped in after Railtrack went under. Britain abandoned the Railtrack experiment amid accusations that dividends for shareholders had taken precedence over investment in the network.
Network Rail said its business plan aimed to improve train services, speed up track replacement and introduce new equipment for testing and repair. The firm wants to cut 20 percent of costs by 2006/7. It will take until 2009 to achieve its target of halving the number of late-running trains to one-in-10.
"We are facing up to the tough choices that the rail industry needs to make," Deputy Chief Executive Iain Coucher said in a statement. Network Rail was trying to modernise the organisation and make up for years of underinvestment, he added.
In a BBC radio interview, rail regulator Tom Winsor declined to say how much money he would make available to Network Rail.
"I have to make an assessment in light of Network Rail’s business plans, its efficiency and how well it looks after its assets. I will be announcing a decision in December and not today," Winsor said.
