Network Rail has warned of "potential loss of life and possible prosecution" if it is forced by the regulator to scale back its £54bn maintenance and renewals programme.
The shocking assessment is contained in a 97-page report delivered to the regulator, Tom Winsor, late last week which is set to re-ignite the row over the funding of Britain's creaking railways.
Mr Winsor, who heads the Office of the Rail Regulator, wants Network Rail to reduce its spending by £1bn to £5bn next year, falling to £4bn annually by 2008. On top of this, his draft plans call for delays to the £9bn modernisation of the west coast main line running from London to Glasgow.
Responding for the first time to Mr Winsor's proposals, Network Rail paints a grim picture of the rail network if it is forced to scale back investment. Most worrying is the possible impact on high-voltage cables which, Network Rail warns, "have already been in service well beyond the [Health and Safety Execu-tive] guidelines for asset life".
Prolonging their life, says the company, "runs a safety risk from explosion of switchgear or cables, with potential loss of life and possible prosecution". Network Rail also warns of a "possible impact on operational performance of critical routes" and admits that "we are in unknown territory regarding the remaining operational life of these assets".
The not-for-dividend company, headed by chief executive John Armitt, warns that reducing its rail-renewal programme could raise the threat of derailments. "[This] will result in an increase in the expected incidence of broken rails. This is particularly likely to occur at bolt holes in jointed track where renewal with continuously welded rail has to be deferred. This will need to be managed carefully since these represent one of the highest risks of derailment."
The company says that if the regulator restricts its funding then it would be forced to focus on renewing infra- structure to keep the network operating in the short term. Planned renewal schemes in Glasgow, the West Midlands, the East Midlands, Port Talbot and the Southern region would have to be deferred.
When Network Rail was formed to replace Railtrack, after it was placed into administration by former Transport Secretary Stephen Byers, the rail industry agreed to pull in the same direction. But old rivalries have re-emerged.
In its own report to Mr Winsor, the Strategic Rail Authority (SRA) raises concerns about executive bonuses available to Network Rail's board. If the five main directors running the company meet their targets then they stand to receive a 60 per cent pay bonus on top of their £1.75m combined salary.
The SRA's report says that it has "some reservations" about the incentives. However, it concedes that it "recognises the case" for the bonuses "provided the long-term costs ... are not excessive". The SRA chairman, Richard Bowker, is also embroiled in a row with Mr Winsor over the possible delays to the west coast project. Shortly after Mr Winsor announced his proposals in July, Mr Bowker hit back, saying: "There will be no delay in delivering its strategy and benefits."
And Mr Winsor has launched a series of attacks on Network Rail. He is expected to make his final ruling on the company's funding by the middle of next month.
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