Network Rail still negotiating Waterloo compensation as works start


Network Rail and train operators are still negotiating what are likely to be multi-million pound compensation payments for disruption caused by the massive £800m Waterloo Upgrade works, which began on Saturday (5 August), Transport Network has learned.

The issue of compensation payments for operator South West trains (SWT) has caused controversy as season ticket holders have been told they will not get refunds or ticket extensions despite the reduced service.

And Anthony Smith, the chief executive of passenger watchdog Transport Focus, called on the Government to step in and order repayments or compensation according to reports.

SWT, whose franchise expires during this month’s works, provoked anger from passengers by stating that it will not pay compensation to passengers above the basic levels set out in its Passenger Charter.


Network Rail is required to pay what are known as ‘Schedule 4’ payments to Train Operating Companies (TOCs), to compensate them for any disruption caused by planned works. This reflects issues such as lost revenue, both at the time of works and on the basis that passengers will be put off services in future.

Usually, these payments are made at the end of four-week period and determined automatically according to formulae in each TOC’s track access contracts with Network Rail. However, bespoke payments can be made in respect of large possessions, to cover additional costs.

Given the scale of disruption to services into Waterloo, which run from 5-28 August and will see 10 platforms closed, it is highly likely that Network Rail will be required to make additional payments. However, a spokesman for the infrastructure operator told Transport Network on Friday (4 August): ‘Negotiations with the train operators in respect of Schedule 4 payments are ongoing.’

Network Rail publishes Schedule 4 payments retrospectively. In 2015/16 it was invoiced for a total of £316m, including payments of up to £60m to one TOC, although it states that figures are subject to change, ‘as and when historic disputes are settled’.

The SWT website states: ‘During the Waterloo works, South West Trains has arranged for 1000 extra staff at its stations and has made arrangements for Transport for London and many other train operators to accept its tickets.’

It adds that ‘well-established’ financial arrangements in place for compensation are overseen by regulator the Office of Rail and Road. However, a spokesman for the ORR declined to comment on the negotiations between Network Rail and SWT. If no agreement is reached, an Access Disputes Committee could be asked to resolve any dispute.

The SWT website also makes clear that ‘Passenger Compensation will continue to be available as specified in its current Passenger’s Charter. It adds that this has been agreed following talks between itself, the Department for Transport and incoming operator First MTR, which takes over the franchise during the third week of Waterloo upgrade works.

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