Back in the days of British Rail, people chose a career in the rail industry more for their love of trains than a desire to earn lots of money.

Privatisation changed that a decade ago, creating many hundreds of jobs with sixfigure salaries. Yet some of the highest wages in the industry are paid to men who work for what is effectively a public-sector company.

Network Rail, created by the Government in 2002 to replace Railtrack, last year paid its four executive directors a total of £3.3 million in salaries, bonuses, pension contributions and “long-term incentive payments”. It says that it is a private-sector company competing for the best business brains with the likes of Shell and BP. But Network Rail has a monopoly over rail infrastructure and its £18 billion debt is underwritten by the Government. John Armitt, the chief executive, never has to worry about going bust or losing market share to a rival.

Mr Armitt’s £499,000 salary was boosted by a bonus of £240,000, an incentive payment of £112,000, pension contributions of £149,000, and £27,000 in undisclosed additional benefits, giving him a total of £1,027,000. Iain Coucher, his deputy, was not far behind at £924,000 and the two other executive directors each earned almost £700,000.

Network Rail argues that other rail industry leaders took home even more. But Brian Souter at Stagecoach (£1.1 million plus pension) and Phil White at National Express (£1.5 million plus pension) both had to compete in a fiercely competitive market to run train franchises.

They are also held to account by shareholders while Network Rail is answerable only to a few dozen rail enthusiasts who can do nothing but ask one or two awkward questions.

Ian McAllister, Network Rail’s chairman, defended the directors’ bonuses in May on the ground that they had rescued the railways from the chaotic, dilapidated state they had been in under Railtrack. “This was an industry in meltdown when we took it over. The company was a broken organisation and it has been completely re-engineered.”

Yet, unlike Railtrack, Network Rail was virtually given a blank cheque book and has pushed overall rail subsidy to four times what BR received.

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