Tuesday 24 July 2001
Released: 24 July 2001

Addressing shareholders at the annual general meeting, Railtrack Chairman John Robinson said that it had been an “appalling year for Railtrack, its customers, the public, its staff and its shareholders. Above everything we think, most on an occasion like this, of the families of those killed, injured and shocked after Ladbroke Grove, Hatfield and Great Heck. As a board we are deeply sorry that these accidents occurred.”

The Chairman went on to outline his first impressions of the company and the industry.

“I have spent a lot of time going round Railtrack and meeting people and I am overwhelmingly impressed by the dedicated people at all levels of the business who are devoted, not necessarily to Railtrack – we have to earn that, but to the railways. I would like to thank our front line staff, who have faced the brunt of our problems this year – be it working long hours, daily engineering work in appalling weather or facing the wrath of passengers and customers over our problems.

“I see a railway not performing well. I see internally a lack of clear structure in many areas and extremely heavy bureaucracy almost everywhere. Morale is low, not surprisingly given the constant criticism from all sources, at all levels. Dealing with these issues has to be management’s key task.

“As we outline in the annual report there is poor performance on many of our major investment projects. Projects which were accepted several years ago without proper specifications, detailed costings and contingencies have led to overspending and missed deadlines. Slowly, one by one we are getting on top of these issues but it will take time.

“As you would expect for a new Chairman, new Chief Executive and new Finance Director, we are reviewing all the strategic options (both financial and structural) for the company in depth. Railtrack needs to get in a position where its objectives for the next three to five years are clear and defined and supported by its chief stakeholders. This is the key to restoring our reputation.

“Finally I have watched in some amazement as key stakeholders in the railways have squabbled in public. We have been to blame as have others, but let me make clear that in future the industry has to work together. Negotiating and criticising in public is not helpful. I am personally dedicated to making a success, not just of Railtrack, but also of the whole railway system. This is a public service and Railtrack must play its part.

Turning his attention to recent issues Mr Robinson said: “I believe safety is absolutely fundamental to every single thing we do in the business and I am committed to ensuring that we continue to move towards a culture of zero tolerance of unsafe acts.

“Latterly executive salaries and remuneration have been, rightly, a matter of public concern. Railtrack is in a position like no other publicly quoted company in providing a public service that has a huge economic impact on the country. Shareholders own the business but the government puts in, both in capital and in revenue, huge amounts of money, so the public also has a legitimate interest in the business.

“That is why we are making a new start on executive remuneration to ensure that executives in the future will be paid in a manner that reflects both their financial obligations to the shareholder but also their public service duties. The results of this independent review will be announced when completed. At the same time it should be remembered that we will only make the desired progress by having the best possible people, highly motivated. This is not paying people less because of their public duties but paying people at the correct level and in a manner that reflects their responsibilities.”

Turning to the subject of the composition of the board Mr Robinson highlighted that four new directors had joined.

“Sebastian Bull and David Harding responsible for business development and finance respectively have joined as executive directors; David Jones, a distinguished engineer and until the end of March Chief Executive of National Grid Plc has joined as a non-executive and myself as Chairman. The board provides a strong blend of skills, particularly in engineering and finance, which are so necessary for directing the business of the Railtrack Group. I have also to tell you that we will be losing the services of two longer serving directors – Christopher Jonas and Jennie Page.”

Thanking them for their service and commitment since joining the original board in 1994 Mr Robinson highlighted their significant role in the development of the company.

Summing up Mr Robinson said “there are a number of big challenges ahead; we recognise that our many stakeholders will only benefit if there is an effective, efficient and safe railway. It is up to the management team to deliver.”

ENDS

Railnews Archive ::: 2001-07-24 RTK-001