THE Institute of Directors has launched a stinging attack on Network Rail in the wake of today's report from the Commons Public Accounts Committee which dubs the rise in cost of electrifying the Great Western Main Line from less than a billion pounds to almost three times as much as 'unacceptable'.

The Committee's report is based in part on evidence which it heard in October from NR chief executive Mark Carne, Department for Transport permanent secretary Philip Rutnam and the chief executive of the Office of Rail and Road, Richard Price.

Mr Price came under fire during last month's hearing because the ORR had approved Network Rail's spending plans, which have now fallen into disarray. Committee members called on him to resign more than once during the session.

Today's report warns that there could be more delays to Network Rail's enhancement programme, which includes several electrification schemes, and says the plans have proved to be 'unrealistic'. It also calls for a 'fundamental review' of the regulator’s role and effectiveness in planning rail infrastructure and urges the government to publish a revised and re-costed programme of improvements, following a review by Network Rail chairman Sir Peter Hendy which is due to be published shortly

The Committee's chair Meg Hillier said: “Network Rail has lost its grip on managing large infrastructure projects. The result is a twofold blow to taxpayers: delays in the delivery of promised improvements, and a vastly bigger bill for delivering them.

“The potential near-doubling in cost of the electrification of the Great Western Line is a symptom of seriously flawed control and planning. Another is the continuing uncertainty over electrification of both the Transpennine route and the Midland Main Line.

“The government has identified rail infrastructure as a vital part of its economic plans, for example in establishing what it describes as a ‘Northern Powerhouse’. It is alarming that, in planning work intended to support these plans, its judgement should be so flawed.

“Our inquiry has found that the agreed work could never have been delivered within the agreed budget and timeframe. Yet Network Rail, the Department for Transport and the regulator – the Office of Rail and Road – signed up to the plans anyway."

Meanwhile the Institute of Directors is highly critical. Dan Lewis, the IoD's senior infrastructure adviser, said: “Network Rail increasingly looks like Greece on Rails. This is just the latest upgrade to be plagued by ballooning costs and stretched deadlines, hitting passengers with endless disruption, and taxpayers with ever more public subsidy for the dysfunctional rail blob.

“Everybody agrees Britain needs a better railway. Everybody knows that will require investment. But with public finances stretched, making sure this much-needed spending is driven to the best projects requires a clear idea of how much they are going to cost before contracts are signed. Passengers will be hoping the new National Infrastructure Commission can get a grip of the situation.

“With billions of pounds in investment, including Britain’s most expensive rail project in history, HS2, coming down the track, and debt standing at £38 billion, Network Rail must figure out how to manage a 21st century railway without costs spiralling out of control."

The ORR said: "The Office of Rail and Road welcomes the Committee’s scrutiny of Network Rail's vitally important rail investment programme for 2014-2019. The escalating costs and late delivery of key rail projects are unacceptable.

“The report recognises that problems have arisen which need addressing for rail users and taxpayers and makes a series of recommendations which affect a number of parties. We need to learn the lessons, and agree with PAC’s recommendations that uncertainties in key projects need to be addressed differently; clear accountability arrangements need to be in place for major projects; Network Rail needs to embed tighter project planning, cost control, and deliverability; and a sector-wide skills strategy for the rail industry is needed.

“With the changes to Network Rail’s ownership and finances since it became a public sector company, ORR agrees that a review of its own role in major projects is appropriate. That review will need to cover the specification, planning and costing of major projects, their delivery and monitoring. It is important that this review covers governance arrangements across all parties."

Network Rail conceded that it was clear the industry had been 'overly ambitious' about what could be achieved with the money available.

A spokesman continued: "Network Rail has successfully delivered over 5,000 projects over the past five years, but our understanding of how best to plan and deliver major new electrification schemes was not good enough.

“Electrifying the Great Western Mainline is an extremely complex task that is being delivered whilst continuing to run an operational railway. It also involves a new design of overhead line equipment, which has been created to be the safest, most reliable and easiest-maintained system ever seen on a UK railway. This is more expensive in the short-term but far better in the long-term both for passengers and the taxpayer.

"We have now made significant changes to the way we plan and deliver our investment programme, which will see schemes progress only once they are sufficiently developed that a reliable cost estimate can be established."