Bill Emery's most significant act since becoming chief executive of the Office of Rail Regulation (ORR) has been to extract £14 million from the rail industry's annual subsidy - via a fine imposed on Network Rail - and hand it back to the Treasury.

Contrast this with the decision in 2003 by Tom Winsor, the former rail regulator, to force the Government to invest an additional £1.5billion a year in the network.

Passenger Focus, the rail consumer watchdog, said that it was extremely disappointed by ORR's “posturing” over the fine, which it said would cost passengers £14 million in lost investment. But Emery says that he is content with ORR's decision to fine Network Rail for overrunning engineering works rather than compensate passengers with improvements to information systems.

The fine will go into the Treasury's consolidated funds, but Emery says that the humiliation of Network Rail will spur it to greater efficiency. “In theory a regulatory fine should have no impact on the passenger. In practice, all I can say is that we are setting fines at a level that sends Network Rail a very strong signal in reputational terms, but has no significant impact on its finances.”

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Emery is clearly frustrated by his lack of powers to hold Network Rail, a Government-created monopoly with no shareholders, to account. He joined ORR in 2005 from Ofwat, the water regulator, where he was chief engineer.

Both industries face the challenge of maintaining ageing infrastructure, but the water industry is split into about 20 regional companies whose shareholders would feel the pain of any fines. “The water industry has the huge advantage for the regulator of having competitor companies of different sizes. That provides a very powerful way of comparing and contrasting one with another.”

He also speaks approvingly of the absence of complex contractual relationships in the water industry. By contrast, privatisation splintered British Rail into 100 separate companies, each with its own set of lawyers contesting its rights.

Emery, who is much more cautious about upsetting the Government than Winsor was, chooses his words carefully: “There are lots of people who say that the current structure is not optimal. I would probably take a raincheck on whether it's ideal.”

However, he says that he was somewhat disappointed that Network Rail rejected a proposal from Merseyrail that it should run its own tracks, saving an estimated £30 million by reintegrating the local network. “We can put some pressure on them, but at the end of the day these matters are for Network Rail. It [the Merseyrail proposal] would have raised big questions and thrown the challenge on to Network Rail.”

On Thursday ORR will announce its draft determination of how much money Network Rail should receive for the next five years. It is expected to give the company about £1 billion less than it claims to need to fulfil the Government's plan to expand capacity and improve punctuality.

Emery is clearly uncomfortable with Network Rail's monolithic structure and receives many complaints from train companies which say that it ignores their needs. But he appears willing to go along with the Government's decision to put structural reform of the railways in the “too difficult” box. Asked directly whether he believes Network Rail is too big and too distant from local decisions, he says: “Again, I will duck that.”

To be fair to him, these are primarily questions for political leaders. The trouble is, they are ducking them too.

Born: June 28, 1951, in Sheffield
Career: B Eng in structural engineering, PhD in public health engineering, University of Sheffield. Engineer at Yorkshire Water (1975-90); head of engineering intelligence, later director of cost and performance, as well as chief engineer, Ofwat 1990-2005; chief executive of ORR since 2005.
What he says: “If [Network Rail doesn't] rise to these challenges, then there is a legitimate question as to whether the structure is right.”
Little-known fact: He admits to sometimes jumping red lights when cycling to work from his flat in Islington, North London, to the ORR offices in Central London.

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