Virgin accuses Network Rail of breach of contract

Virgin Rail, the train-operating arm of Sir Richard Branson’s Virgin group of companies, is demanding that Network Rail, the authority that is responsible for the UK’s rail network, carry out millions of pounds worth of improvements to its infrastructure.

Virgin says that the customer-focussed improvements should be carried out in order to compensate passengers for Network Rail’s recent poor punctuality performance. Virgin Trains owner, VRG, intends to enforce improvements in punctuality, as it believes that Network Rail’s current inadequate performance is tantamount to a breach of contract and is bad for business.

Virgin’s stance follows criticism levelled at Network Rail by the Office of Rail Regulation, which could levy fines of up to £75 million on the rail operator for failing to hit punctuality targets on long distance routes, such as Virgin’s. Virgin, however, would prefer to see that money used for punctuality improvements, rather than being paid in fines to the UK’s Treasury.

VRG’s chief executive, Tony Collins, 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.’

Of the delays experienced by Virgin Trains, more than 70 percent are due to problems with Network Rail’s infrastructure, and just 15 percent are attributable to Virgin Rail.

Over the last two years, Virgin Rail has failed to meet most of the targets that had been set for it by the Office of Rail Regulation.