Richard Branson says Network Rail is “too big”

<p>Sir Richard recommends the company be split up into smaller units.</p>

Richard Branson has told the BBC he believes Network Rail is to big and should be broken up into smaller, regional units.

Sir Richard, who founded the Virgin Group, which part-owns Virgin Rail with Stagecoach, explained that many of the delays his own customers experience are actually the fault of Network Rail.

"Network Rail is far too big a company," he said.

"I think that companies that kind of size should be broken up into small units," he added.

Sir Richard also indicated that he thinks train operators should manage the tracks they use.

"We get enormously frustrated that people say that Virgin Rail has delays, but 90 per cent of those delays are down to Network Rail," he explained.

"If we were running the track underneath because we've got our trains running on that track, we'd make absolutely certain that track was fixed and running well because we value our reputation," he said.

However, Sir Richard also wasn't convinced that a break up of Network Rail would ever happen. When asked about the possibility, he answered: "I don't know; I've thrown that idea out before. Maybe right now it's an option that might be considered.

Network Rail mistakes lead to improvement delays

Sir Richard's statement comes after a government move to shelve promised and vital upgrades to major rail lines in the Midlands and the north of England – despite election promises to 'rebalance' the country and create a 'northern powerhouse,' the Guardian reports.

Transport secretary Patrick McLoughlin explained that the government had paused improvement works to electrify the Midland mainline from London to Sheffield, as well as the TransPennine route between Manchester and Leeds. Mr McLoughlin said these projects had to be delayed because Network Rail's costs spiralled and the company missed vital targets.

He also warned that the investment, which had been promoted as the biggest upgrade to the railways since Victorian times, would not deliver projects as promised in its five-year, £38.5 billion plan because of Network Rail's 'unacceptable performance'.

Network Rail's chairman Richard Parry-Jones is to step down and will be replaced by London transport commissioner Sir Peter Hendy.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.