Railtrack threatened by rising cost of train protection system

The costs of installing a new nationwide rail safety system in the wake of the Paddington disaster have nearly doubled, it emerged yesterday.

In the six months since the crash in which 31 people were killed the bill for introducing the Train Protection Warning System (TPWS) has risen from £220m to about £400m and could escalate further.

Who will pay for the costs of avoiding another Paddington will now be the subject of a battle between Railtrack, the infrastructure company, and Tom Winsor, the Rail Regulator.

Train operating companies have accepted that they will have to pay £50m, but impending negotiations between Railtrack and Mr Winsor will decide what proportion of the rest will be borne by the infrastructure company's shareholders, tax payers and passengers. News of the growing TPWS budget emerges ahead of the inquiry into the crash by Lord Cullen, which begins tomorrow.

The deputy prime minister John Prescott has insisted that the system - which would have probably prevented the Paddington disaster - must be installed to cover all potentially hazardous signals throughout the network.

The increase in the estimated cost of TPWS is partly a consequence of the contracting process and partly because the industry has agreed to complete the project a year earlier in mid-2003.

The device automatically slows down trains ahead of warning signals and triggers the brakes if trains runs past a red light.

Railtrack believes it will "dramatically lessen" the consequences of trains passing signals at danger, when it is fully fitted to 11,000 key signals.

The system is to be installed ahead of the intended introduction of the more sophisticated and fail-safe Automatic Train Protection hardware which will cost £1.1bn and could be superseded by new European laws.

The escalating costs come amid a deteriorating relationship between Railtrack and the Regulator after he issued an enforcement order against the company ordering it to provide more detailed information about the progress of work on upgrading the West Coast Main Line between London and Scotland.