Mr Swift said, in a letter to the anti-privatisation group, Save Our Railways, that Railtrack's "current level of underspend is wholly unacceptable to me and I expect prompt action to remedy this". He is demanding that Railtrack sets out its investment programme to "show clearly and unequivocally whether or not Railtrack is delivering [its] investment programme."
Railtrack's underspend in its first two and a half years of existence amounts to 25 per cent of the amount it should have invested to maintain and improve the rail network. Railtrack has consistently failed to spend the amount it is required to do so by the Regulator and earlier this month it revealed that in the first six months of this financial year it only spent pounds 193m compared with the pounds 259m it had promised. Yet, profits jumped from pounds 111m in the six months to 1 October 1995 to pounds 145m in the same period this year.
Save our Railways said the company put profits before investment. "For two years, Railtrack has broken the Regulator's rules on how much money should be spent on rail maintenance. Now Railtrack will have to increase spending radically on the rail network or risk the Regulator taking action," said Jonathan Bray, co-ordinator of the campaign.
According to an industry source, Railtrack's capacity to invest has been inhibited by the fact that it has had three reorganisations since its creation in April 1994 and earlier this week announced yet another one.
The spectre of underinvestment by a privatised Railtrack was raised by opponents of the sale throughout the privatisation process but ministers said that safeguards were in place.
However, Mr Swift told The Independent last night that the role of a regulator "was not only to wield statutory powers but to carry on a regular dialogue with Railtrack". In fact, Mr Swift's powers are circumscribed. Railtrack has a seven-year contract - negotiated with Mr Swift - which determines the level of its income from train operators and that cannot be changed until 2001.
Mr Swift's most serious sanction would be to refer Railtrack to the Monopolies and Mergers Commission but he is only likely to do this if it continued to fail to invest over a long period.
A spokesman for Railtrack said the company had spent pounds 100m more in the first six month of this financial year than in 1995, but he accepted that targets had not been met. "We come from a culture where it has been difficult to spend huge sums of money because of the annual Treasury restrictions. There is also the need for our suppliers to develop to match our spending requirements."Reuse content