Outlook: Railtrack is right to be open about its profits

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The Independent Online
FACED WITH a crisis of confidence and a barrage of hostile publicity, most chief executives would be desperately searching for ways of artificially inflating their profits. Not so Railtrack, which by Gerald Corbett's own admission is now one of the most hated companies in the land. In fact, it has become so unpopular following the Paddington crash that the board meeting to sign off yesterday's interim results spent time wondering whether it wouldn't be better to freeze the dividend and massage the profits down.

At a time when Railtrack is under attack from politicians, regulators and the travelling public alike, and a scapegoat is in demand, to pop up with (yet another) record set of earnings and a further hike in the dividend, might seem just a little inflammatory.

But in the event Mr Corbett and Co decided to brazen it out and live with the screaming headlines deploring how much they are coining every day from passengers and taxpayers (most of Railtrack's profits come from subsidies paid to train operators).

And of course they were right to do so too. For one thing, Mr Corbett and the rest of the board would have been found out had they tried to hide Railtrack's true profits. For another, it reminds everyone of the painful fact that if Railtrack is to build the railway that everyone wants, then there must be sufficient profits to underpin the colossal investment this will entail. Post-Paddington, Railtrack is looking at spending pounds 33bn over the next 10 years to support a 50 per cent increase in rail usage. Such growth was never even dreamed of when the industry was privatised three years ago.

The pugnacious Mr Corbett makes no apologies for sticking to his guns, but he promises too, that Railtrack will henceforth present its case with humility and a new-found sense of its public-service duty. If he can change his spots then perhaps so too can the regulators, by recognising that, ultimately, they have a common interest in promoting a 21st century railway.

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