Railtrack faces fines if it reneges on spending plans
The move was seen by many industry observers as the first of a series of measures under the new Labour administration designed to increase customer confidence in industries privatised by previous Conservative governments.
Prime Minister Tony Blair yesterday pledged changes to the regulatory system governing bus services, saying there were "severe problems" in the regulatory system and there would be changes made to it.
But while the Government contemplates further legislation for buses, the slow pace of investment by Railtrack has forced Mr Swift to act. He said: "There remains a substantial backlog of expenditure on network assets, stations and depots which Railtrack must eradicate as a priority."
With all the train companies' subsidies fixed under the franchising process, Mr Swift is quick to point out that "most of [Railtrack's] annual expenditure is funded by the state". More than pounds 2bn of public money will be poured into Railtrack this year - accounting for more than 85 per cent of its turnover.
"Assurances that the capital and maintenance programme will be carried out require something more bankable than the expression of intentions," he said.
The regulator's announcement came just a day after Railtrack outlined a pounds 1bn plan to upgrade the nation's stations under its network management strategy. He praised the vision presented by the company. "We have to accept that the spending is far better than it was when Railtrack was in the public sector," said Mr Swift.
Railtrack claimed it was too early to comment on the announcement in detail, despite being kept fully informed by the regulator's office of the policy since the middle of March.
There is little the company can do to stop the regulator from obtaining new powers. It could seek a Monopolies and Mergers Commission reference, and would then have to prove the regulator was acting against the public interest. Even if the MMC were to agree, the regulator only has to take into account the commission's view and could press ahead regardless.
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