Fantasy funding

Telegrammed by the General Manager
NR piles on £1.1m of debt each day across CP4

As the bosses of Network Rail passed round the celebratory steaming mugs of Horlicks (avoided) on Monday when WCML got off to a reasonably good start their collective attention doubtless turned to fighting the CP 4 settlement and thinking who is going to lend them money over the next few years.

ORR's figures show that NR's position over the next few years is dire and getting worse.

Expenditure exceeds income in all but 2013/14 and interest payments just get bigger each year, in fact they almost exactly match the total TOC premium - assuming this can be sustained.

ORR Assumptions of Network Rail’s net debt in Control Period 4
(£M 2006/7 prices)	2009/10	2010/11	2011/12	2012/13	2013/14	Total
Opening debt	21,267	23,841	26,638	28,585	30,230	21,267
Total income	-5,921	-6,138	-6,345	-6,491	-6,647	-31,542
Total expenditure	7,304	7,556	6,780	6,502	6,235	34,337
Net interest costs	1,188	1,379	1,512	1,619	1,711	7,410
Tax	2	0	0	14	10	26
Total movement in debt	2,574	2,797	1,947	1,645	1,309	10,271
Closing debt	23,841	26,638	28,585	30,230	31,538	31,538
Source: ORR Doc 329167.02 dated 4 November2008

Bold statements by NR that commercial lenders are gagging to pile cash onto this debt mountain without a government guarantee seems self-delusional.

There is no way, other than doubling fares, or even more improbably NR becoming a really efficient world-class business, that any inroads can be made into this ever-growing debt mountain.

Also the oft repeated statement that commercial lenders will be a lever for achieving better governance seems a little cart before the horse.

Any commercial lender will insist that NR changes its governance well before it antes up the cash and it may well be that the NR board won't like the messages they get told.

Meanwhile its back to bashing ORR in the hope they will hand out more dosh and postpone the need to take difficult decisions.

NatEx to sack 750

Telegrammed by the General Manager
Thousands of pissed off customers, 750 Christmases wrecked and one boss sitting pretty in a pear tree.

In this season of goodwill it will be a comfort to every Scrooge to see NatEx sustaining its unenviable reputation for customer care and people management (most recent critique Martin Vander Wyer's annual railway rant in this week's Speccie) in dumping 750 front line staff.

Selling the railway journey experience in the coming months is going to be hard work but there are much bigger issues at stake.

It clearly must not override the far higher priority of rewarding board-room excellence.

Bowker's package is equivalent to some 40 or 50 front line workers and boardroom hand-outs probably represent 250 plus workers who could really make a difference.

This is just the sort of tough management decision that has to be taken and does so much for a company's reputation.

Hendy goes with the bendy

Telegrammed by The General Manager
Have you noticed Peter Hendy's extraordinary re-invention of himself as a right-wing gent?

In the latest Transit he claims to have "cast off the cloak of revolutionary socialism". No doubt he will soon be owning up to his mum's title and that his brother is a noted silk (John Hendy QC).

Is there nothing our boy won't do for the rich boys and toffs who now run City Hall?

But will it be enough to save him?

Probably not.