Network Rail (NR) "failed to deliver" on major commuter and long-distance route punctuality last year, with many thousands more late trains than there should have been, rail regulators said today.
Committed to deliver average punctuality levels of 92% on long-distance passenger services in 2013/14, NR "fell significantly short" with a figure of 86.9%, the Office of Rail Regulation (ORR) said.
As a result, under an order made by ORR in 2012, NR is having to return £53.1 million to the Treasury in what is effectively a fine.
On long-distance performance in the five years ending March 2014, the ORR said NR "did not deliver all of its plans to improve performance and, particularly in the early years of the (five-year) funding period, had insufficient knowledge of the condition of its key assets, such as earthworks, electrical equipment and drainage".
The ORR added that on London and south east England (LSE) passenger services in 2013/14, NR achieved punctuality levels of 89.6% against a target figure of 93.0%.
The ORR said: "As a result of missing its funded obligations, and to address issues which have disrupted services for passengers, the company has committed extra funds to improve the resilience of the rail network in LSE. Plans expected to include projects costing at least £25 million must be in place by December 2014."
The ORR was, however, pleased with certain aspects of NR's performance over the period 2009-14.
It said the company had delivered a major rail enhancement programme largely on time and budget, bringing real benefits to passengers.
Across 118 projects, 98 were delivered early or on time, with only one delayed in a way which had a notable impact on customers. The company has also electrified railways in north west England to bring more reliable services to the region.
Also, NR had made significant investment in Britain's freight network through projects to improve capacity and reliability of freight services. This included schemes to enable the running of longer trains and the introduction of new routes on the East Coast corridor.
The company had also helped to improve safety at level crossings, as more than 800 crossings across Britain have been upgraded or closed.
In addition, working with the rail industry, NR was helping to carry record numbers of passengers and freight on the rail network. There were more than 1.5 billion passenger journeys on the network in 2013-14, up from around 1.2 billion in 2008-09. The amount of freight goods carried has increased from 102.7 million tonnes in 2008/09 to 116.6 million tonnes in 2013/14.
The ORR also said NR and train operators worked well together to keep rail services running safely throughout the challenging weather conditions of winter 2013-14. The company worked quickly to recover routes affected by the weather, as demonstrated in its work to repair the line for services running through Dawlish in Devon which were wrecked in the winter storms.
ORR chief executive Richard Price said: "Network Rail has been successful in modernising and improving Britain's railways over the past five years, during a period which has seen a record rise in passenger numbers.
"Punctuality is important to passengers. NR committed to improve train punctuality between 2009 and 2014, and was funded to do so. But it did not deliver its commitments for passengers who travel on long-distance and LSE services.
"NR fell significantly short of punctuality for long-distance services, so it is right that money is returned to funders (the Treasury). The company will be undertaking extensive maintenance and renewal work to improve punctuality on long-distance services between 2014 and 2019. It has committed extra funds to improve the resilience of the rail network in LSE for better reliability of services in the future."
Mr Price went on: "NR's performance will continue to be under the spotlight. It must now deliver the basics in planning and managing the reliability of key components of the rail network such as bridges and earthworks, and deliver its performance plans to ensure it meets all obligations for customers between 2014 and 2019.
"The company has shown it can plan performance effectively and predict and prevent problems before they cause disruption - as demonstrated for the London 2012 Olympics - and it must repeat these standards across the entire network."
Network Rail chief executive Mark Carne said: "This is a time of unprecedented growth and record levels of investment in Britain's railways. As a result, today we have the safest, most improved passenger railway in Europe."
Mr Carne, who joined NR in February, went on: "We accept that we have fallen short of the regulatory targets for train punctuality and that this is, in part, down to our failure to reduce infrastructure faults quickly enough.
"At the same time, the sharp increase in passenger demand has led us to run more trains at peak times, even when we know this will lead to a more congested railway and punctuality targets may suffer.
"Passengers do want trains to run on time, but for many people, particularly commuters at the busiest times of the day, increased services with less crowding is a key priority. This trade-off between congestion and punctuality is a daily issue on many routes."
Mr Carne continued: "The industry is now benefiting from significant funding but there remain challenges following many decades of underinvestment.
"Getting train reliability back on track is a key priority for us over the next three years in particular and we have good plans to improve the underlying reliability of our assets alongside significant investment to increase capacity and relieve congestion. I am confident that by the end of this control period (2019) we will meet and indeed exceed the regulatory performance targets."
Manuel Cortes, leader of the TSSA rail union, said: "This is yet another example of the crazy money merry-go-round that is at the heart of our fragmented rail industry.
"All the politicians are doing is taking taxpayers' money from Network Rail and re-cycling it through the Treasury - this time to spend on one of their pet projects, faster wi-ifi that should be paid for by the private rail companies.
"Once again, passengers lose out while private rail firms are laughing all the way to the bank."
Michael Roberts, director general of rail industry body the Rail Delivery Group, said: "Britain's railway achieves higher passenger satisfaction and has a better safety record than any of its major European counterparts.
"Major improvements made by NR in the last five years have been key to that success, but the industry's recent record on punctuality has not come up to scratch. Passengers rightly expect something to be done."
He went on: "NR has been penalised for its failure to reduce infrastructure faults quickly enough in the face of growing demand and will remain under the regulatory spotlight.
"The news that Government wants to use the funds returned to the Treasury to pay for improvements, alongside plans to make the network more resilient, are positive signs of how the system can work for passengers.
"Equally important is the joint commitment of train operators and NR to raise our game on punctuality. By working together to improve the physical and operational reliability of the track, trains and other parts of our network, we aim to make Europe's best railway even better."
Anthony Smith, chief executive of rail customer watchdog Passenger Focus, said: "Our research confirms what many passengers had already experienced - rail performance remains too patchy.
"Many passengers have been inconvenienced by NR's failure to reach its targets on punctuality for long distance and services in LSE."
He went on: "Punctuality remains one of the top priorities for improvement - as rated by passengers.
"It is important that the penalty is invested to improve the passenger experience, particularly for those who suffered as a result of these missed targets as nearly two thirds of the industry's funding now comes from passenger fares.
"Passengers will want to see punctuality targets being met in the future."
Transport Secretary Patrick McLoughlin said: "We are investing record amounts to improve our railways and Network Rail is playing a vital role in delivering that.
"However, it's only right that when standards slip they are held accountable. It is also right that passengers benefit from the fine which is why we are investing all of it to improve wi-fi on trains. We all know how frustrating it can be to have our phone calls and internet use constantly disrupted by poor signal."