The report, commissioned by the rail regulator, said Railtrack had failed to tackle train delays, shabby stations and ageing signalling. It also found Railtrack's maintenance spending was "below expectations" and warned that a backlog of work was emerging.
John Prescott, the Deputy Prime Minister, said: "The report paints a sorry picture of its performance as stewards of the country's railway network."
He said he was considering paying the pounds 1.5bn annual subsidy direct to Railtrack, giving the Government a big voice in the company's strategy, as The Independent reported on Monday.
Shares in Railtrack fell yesterday with the publication of the report by consultants Booz Allen, who were commissioned last year by the outgoing rail regulator to measure Railtrack's performance since 1995. The new rail regulator, Tom Winsor, will use their findings to set the charges that train operators must pay to use Railtrack's network after 2001. Railtrack has already been told to deliver greater improvements or face a cap on its profits.
Booz Allen said: "It is likely that there has been a decline in the underlying quality of the network assets as a whole. Generally, Railtrack's physical activity in renewing assets has been below expectations."
The report said Railtrack had funnelled money to areas where it gained the most financial benefit at the expense of long-term projects to improve journeys for passengers.
Railtrack said the report had been written "with the benefit of hindsight" and before its pounds 27bn, 10-year investment plan was unveiled last month. It said it should be put in the context of a 25 per cent growth in passenger demand and a planned tripling of rail investment. Gerald Corbett, the chief executive of Railtrack, said: "The report highlights there is still much to do. We face huge challenges and Railtrack is dedicated to getting it right and doing better."
Save Our Railways, the pressure group, said the report left Railtrack's reputation "in tatters" and highlighted the need for tougher regulation.Reuse content