Network Rail is on track with cutting costs, but says revenue is still falling

NETWORK RAIL, the rail infrastructure company, reported pre-tax profits of &pound;146m for the six months to September yesterday, but said its net debt remained at more than &pound;22bn, and its pension deficit had risen to almost &pound;1bn.<br /><br />But chief executive Iain Coucher said the group was making good progress towards its efficiency savings target of &pound;4.1bn.<br /><br />&ldquo;Maintenance costs are declining, staff costs have been held steady, and our investment programme continues apace. The debt programme continues to be prudent, well managed and fully hedged&rdquo; he added.<br /><br />Smarter working processes were helping it cut costs significantly, Network Rail?said.<br /><br />Revenues at the group were down, falling from just under &pound;3.12bn in April-September 2008 to &pound;2.84bn in the same period this year. <br /><br />But the firm, which is slashing 1,500 maintenance jobs in the coming 18 months, said the falling revenue had been partly offset by &ldquo;strong performance in cutting delays to passengers and better planning of improvement work&rdquo;.<br /><br />The rail group said its debt was at a sustainable level, and that it had cut its charges to customers and freight users who were struggling in the downturn.<br /><br />Net operating costs had fallen from &pound;1.89bn in April-September last year to just under &pound;1.75bn in April-September this year.