Train operators are starting to express concern that Network Rail could suffer a loss of confidence similar to the paralysis that afflicted Railtrack after the Hatfield crash, following the chaos surrounding the company's New Year engineering projects.

The fears surfaced at an industry meeting held by the Office of Rail Regulation last week which was dominated by discussion of Network Rail's high profile mismanagement of schemes at Rugby, Liverpool Street and Glasgow, and the subsequent closure of sections of the railway for several days longer than scheduled.

Some operators argued that the ORR should take sharp, punitive action against Network Rail, but others called for restraint, pointing out that the company had acknowledged it had major issues to overcome and that it needed space to sort them out. They suggested that a continuing barrage of public criticism from operators, MPs, regulators and media commentators could result in Network Rail adopting an excessively risk averse approach. This could threaten delivery of the huge five-year enhancement and renewal programme set out by Department for Transport and Network Rail last summer.

Signs that the New Year failures will make route managers more inclined to cancel possessions rather than risk overruns have already emerged. A large renewals project scheduled for January 11-14 at Three Bridges was cancelled with operators given just 48 hours notice. Uncharacteristically, Network Rail justified the move by saying it would not have been able to hand the railway back on time.

"From what I've seen, I think they took the right decision this time, but clearly they can't keep cancelling work," Gatwick Express managing director Mark Hopwood told Transit . "That's why we have to be careful at the moment in how Network Rail is dealt with because they have a huge amount of work to do and we don't want them to have a collective management breakdown where they feel they canÕt take possessions."

Comments from other operators suggested that significant changes are required if Network Rail is to develop the confidence and the project management and technical competence needed to deliver the enhancement and renewal plans scheduled for the next five years.

Virgin Trains managing director Chris Gibb said that less than three weeks before the work at Rugby began, Network Rail had been "frantically moving resources around" to try to get the right teams in place despite having scheduled the project 12 months earlier. "It had all the signs of a project that was completely out of control," Gibb concluded.

The frenetic approach to planning the Rugby work, which eventually overran by four days to January 4, saw a large renewals scheme at Stevenage significantly scaled down and one at West London Junction cancelled so signalling testing resources could be transferred. Operators believe the episodes pose questions over Network Rail's ability to improve the railway. "I have very serious concerns about planning renewal of the network," First passenger development director Jim Morgan told Transit.

Comments from One managing director Andrew Chivers, whose terminal at Liverpool Street reopened a day later than expected on January 3 suggested Network Rail needed to address how it managed routine maintenance and renewal as well as larger projects. In a letter to Network Rail chief executive Iain Coucher, he said that there had been "a staggering 32 engineering overruns" on his network in one four-week period at the end of last year.

Meanwhile, the New Year resignalling project at Shields Junction in Glasgow overran by more than a week to January 14 resulting in services being restricted throughout that time.

Network Rail chief executive Iain Coucher said that the main cause of all the overruns had been "a critical shortage of specialist engineering and contractor staff". He indicated that around 200 extra engineers, a large number of them electrification specialists, would be recruited by Network Rail and that he would be personally demanding explanations from the contractors responsible for managing and carrying out the New Year work.

Previously, ORR had announced that its investigation into Network Rail's performance over the New Year would look at wider issues than the late delivery of the projects at Rugby, Liverpool Street and Glasgow. "We will determine whether the company is breaching its licence to operate the network, and if so what remedial action it needs to take," ORR chairman Chris Bolt said.