The Government has launched a search for a new chief executive to take over at Railtrack immediately amid growing concern about the deterioration in the rail network.
Ministers have decided that it is essential to fill the vacancy quickly as the infrastructure operator is likely to be in administration for at least a year before the successor not-for-profit company planned by the Secretary of State for Transport, Stephen Byers, is set up.
Steve Marshall, the chief executive of Railtrack Group, which is not in administration, is serving out his six-month notice period. But the bulk of his time is now being taken up fighting the Government for compensation on behalf of Railtrack shareholders following the decision to pull the plug on the plc company.
Since Railtrack plc was placed in administration two months ago train delays have risen by 26 per cent. The exodus of staff is gathering momentum and an efficiency drive, which had been scheduled to deliver savings of £1bn, has been put on ice. Industry chiefs have told Mr Byers that a new chief executive for Railtrack plc is urgently needed.
The company is now being run by the four joint administrators from Ernst & Young, who have no expertise in operating a railway. The administrators have already said that £3.5bn will be needed for the rail network between now and the end of the year.
Many senior rail executives have already ruled themselves out of taking the job and even if a successful candidate is found, there is no guarantee how long the post will last. This will depend on whether Railtrack is taken over by the company limited by guarantee, which Mr Byers favours, or a private bidder such as WestLB and Babcock and Brown.
At the weekend Mr Byers admitted that Railtrack could remain in administration for up to a year. The attempt to find a new chief executive comes as Railtrack, the Strategic Rail Authority and the Government are on the verge of agreeing a £300m deal to compensate Virgin Trains because of delays on the West Coast Mainline upgrade.
Railtrack had agreed to modernise the line to accommodate trains travelling at 140mph by 2005 but cost overruns have forced it to scrap this phase of the project. Railtrack has also conceded that 125mph trains will not be able to enter service until 2003 – a year later than planned. The payment to Virgin will compensate it for the revenues it will lose by not being able to operate as frequent a service as intended with its £600m fleet of 53 Pendolino tilting trains. One option is for the Government to fund the £200m cost of an additional 11 trains for Virgin to enable it to put on more services. Another is to adjust the level of the franchise payments Virgin is due to start making to the Government from 2002 onwards.
Virgin yesterday took delivery of the first two of the fleet of Pendolinos being built at Alston's Washwood Heath plant in Birmingham. The 441-seater trains will enter service next April, operating at a reduced speed of 110mph. From May 2003, when the first phase of the upgrade is complete, the Pendolino will cut the journey time from London to Manchester by 35 minutes to two hours and five minutes.Reuse content