Railtrack `starving network of investment'

Sell-off row: Labour claims cash for improvements is being lost
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The Independent Online
The Rail Regulator is seeking assurances from Railtrack about its investment plans after the Independent's disclosure that the state-owned company has set aside pounds 1.14bn in advance of privatisation rather than spend it on railway maintenance and improvement.

The move is disclosed in a letter from the regulator, John Swift QC, to Brian Wilson,Labour's transport spokesman, who had protested that Railtrack's annual accounts had disclosed that the money had been set aside to "boost its pre-privatisation balance sheet" when it could have been spent on "cash-starved railways".

Mr Wilson pressed the regulator to ensure that the money paid to Railtrack by rail operators after privatisation in access charges would be used for the purpose for which they had been originally intended - namely investment and maintenance of track and signalling.

The MP called last night for the postponement of Railtrack's privatisation. "It will be a monstrous fraud on the taxpayer and passengers if they are allowed to carry the proceeds of this billion pound underspend into the private sector," he said.

In his letter, Mr Swift says: "While one year's expenditure figures should not be taken in isolation, I will want to be clear that Railtrack does indeed have plans in place to achieve the increase in expenditure, particularly in 1996-7, needed ... to start addressing the shortfalls in expenditure levels.

"The form and content of Railtrack's statutory accounts are for the directors and the company's auditors to determine, not for the regulator.

"But I will want to ensure that the accounts provide the necessary information to allow me, Railtrack's customers and others with a legitimate interest to understand the underlying financial position of the company."

Mr Swift says that he will especially "want to ensure that Railtrack continues to disclose expenditure on asset maintenance and renewal ... so that any change in levels of expenditure or adjustments to the provisions made this year is clear to readers of the accounts".

It also emerged yesterday that two out of three Tory MPs accept that rail privatisation is electorally unpopular.

The survey of 51 Tory MPs for the pressure group Save Our Railways also interviewed 42 Labour and seven other MPs.It also found that nine Tory MPs would welcome a rethink on the issue which was introduced by the Railways Act 1993.

While three-quarters of Conservative MPs believe that standards will improve, nearly all the Labour members and other MPs hold the opposite view.

The group's co-ordinator, Jonathan Bray, said: "The late Tory MP Robert Adley's prediction that privatisation would be a `poll tax on wheels' is now coming true."

Tomorrow the High Court will hear the judicial review of the franchising process brought by Save Our Railways.

t The survey of 100 MPs was conducted by Business and Planning Research International on behalf of Connect Public Affairs.