Network Rail aims to improve train punctuality

The cuts were announced in Network's Rail 10-year business plan on Monday and were immediately criticised by unions, who threatened industrial action.

The 14,000-strong workforce, including signalling staff, engineers, administration workers and other employees, could be reduced to 12,000 by 2006, it said.

The company also said it could take until the end of the decade to bring train punctuality back to pre-Hatfield crash levels.

It wants to reduce the number of late-running trains to one in 10 by 2009, rather than the current one in five.

We always knew that Railtrack was inefficient, but not so inefficient that it employed 2,000 people too many Richard Rosser TSSA rail union

Unions described the cuts as "obscene" and questioned how service could be improved with fewer staff.

Network Rail, a not-for-profit company which runs the UK's railways, said the cuts were part of cost-saving measures to meet government targets on improved punctuality.

But the Rail, Maritime and Transport Union (RMT) has reacted angrily to the planned job cuts.

Bonuses

Its general secretary Bob Crow said: "It is huge bonuses for the directors and P45s for the rest.

"We will resist any compulsory redundancies, with industrial action if necessary."

Richard Rosser, general secretary of the TSSA rail union, said he was surprised and concerned by the announcement.

We are absolutely determined to drive down costs Iain Coucher Network Rail deputy chief executive

"We always knew that Railtrack was inefficient, but not so inefficient that it employed 2,000 people too many.

"How can Network Rail hope to get rail back on track having axed so many workers?

"Last week we hear of loyalty bonuses for directors and now thousands of jobs will go - this simply does not add up," he said.

Mr McAllister insists that Network Rail did not in fact pay bonuses to directors.

He said executives were paid bonuses for six months last year when Railtrack continued as a company, but was under administration.

"I am not disputing the money was paid, I am simply making it clear that that money was not paid by Network Rail, but was paid by the administrator."

The rail regulator Tom Winsor told the BBC: "The administrators had to run a company which was in crisis, and they took the judgement that it was necessary to retain certain key individuals, and large amounts were calculated for that purpose.

'Wasted money'

"The administrators are accountants, they didn't know very much about running the railway."

Network Rail is also hoping to quadruple the rate at which it replaces tracks and introduce new equipment for testing and repair.

The company said it needed to spend about �54 billion over the next ten years in order to carry out the work it wants to do.

Conservative party transport secretary Tim Collins criticised rail performance under Labour, saying "the cost of the railways has soared, but delays have doubled".

"Now there is a real danger that good money is being wasted without any proof that things are getting better.

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"That is hardly a fair deal for long-suffering passengers," he added.

Network Rail's efficiency programme includes savings of �266 million from the maintenance budget, a �246 million reduction in operating costs and cumulative savings of �12.9 billion over the business plan period.

The company's deputy chief executive, Iain Coucher, said: "We are absolutely determined to drive down costs.

"The efficiency improvement programme sets out detailed plans to deliver annual efficiencies of �1.3 billion by 2006-07, while ensuring quality, performance and renewals volumes are maintained.

"Our key objective remains unchanged - to deliver safe, reliable and efficient rail infrastructure."

A decision on how much Network Rail will receive in funding will be made by the Independent Rail Regulator.

The company failed to meet a train punctuality target of 83% in 2002-3.