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Virgin Rail takes action against Network Rail over breach of contract

Virgin Rail takes action against Network Rail over breach of contract

Virgin Rail Group has issued a demand that millions of pounds of customer-focussed improvements be made by Network Rail to compensate customers for poor punctuality in recent months.

VRG, the owning group of Virgin Trains, is also preparing enforcement action to bring punctuality improvements, following sustained poor performance by Network Rail, which VRG believes is a breach of contract and has deterred some customers from travelling and damaged its business.

Network Rail has been strongly criticised by the Office of Rail Regulation for failing to meet punctuality targets, and faces fines of up to £75 million for poor performance on long-distance routes, including the West Coast Mainline operated by Virgin Trains.

But VRG today called for any financial penalties to be in the form of customer improvements, and not in fines paid to the Treasury that remove investment from rail.

Tony Collins, chief executive, VRG, said: “Network Rail has consistently failed to deliver what it is contracted to deliver.

“That has directly affected customers’ experience, and their impression of rail travel. So any penalties levied on Network Rail should be in the form of tangible improvements that customers benefit from.

“There is really no benefit to Network Rail, customers or VRG in having money leave the industry.”

Network Rail has missed targets agreed with Virgin Trains over the last two years, and punctuality stands at 85.7 percent in the most recent four-weekly period ending May 25th, against a target of 88 percent.

More than 70 per cent of delays are a result of Network Rail infrastructure issues, with fewer than 15 per cent caused by Virgin Trains problems.

The remaining delays are caused by other freight and passenger operators.

Virgin Trains has developed the fastest-growing long-distance network in Britain, with the highest satisfaction levels achieved by a long-distance franchise at 92 per cent.

But punctuality has suffered in recent months, despite Virgin Trains rolling stock beating all its own targets.

Meanwhile, Network Rail has failed to meet most of its targets over the last two years.

In the current financial year, starting in April, Network Rail delays have added more than 1,000 hours (65,000 minutes) to Virgin Trains’ customer journeys.

Collins added: “Providing world class customer service is the vision of Virgin Trains.

“We have spent hundreds of millions of pounds on a fleet of reliable trains and we pay Network Rail nearly £200 million a year to maintain the West Coast Mainline for us.

“We feel that we are not getting value for money in this respect and our customers have been let down and deserve more consistency.

“We have made our case strongly over many years to Network Rail, ORR and Government. But reluctantly we have taken this difficult decision on behalf of our customers.”

VRG plans to take the action under contractual and industry arrangements available to train operators to ensure performance improvements.