Big cuts and fare rises in secret BR papers

(First Edition)

CONFIDENTIAL planning papers drawn up by senior British Rail managers in the run-up to privatisation predict that rail fares could rise by as much as 10 per cent and services will be severely reduced.

The managers have compiled discussion documents outlining the likely consequences to the rail service of privatisation, which is expected to be phased in by the Government from next April. They believe the results could mean:

The number of stations that sell tickets for long-distance journeys could be reduced from about 800 to 400.

Very high legal costs - 'astronomical' one BR source said - could be incurred in drawing up contracts among the dozens of new rail companies.

Passengers may have difficulty in switching between competing companies on some lines. This would particularly effect concession rates, such as tickets for the elderly and for off-peak travel. People using lines operated by separate companies might have to pay extra.

Uneconomical routes, many of them rural, and late night and early morning services, could be axed by BR in the period before privatisation.

The companies would have to be extremely profitable - showing returns of 20 to 30 per cent - in order to attract City investors who view the privatisation as involving high risks.

These findings contradict assurances made in the Commons by John MacGregor, Transport Secretary, that fares will be reduced and services improved under privatisation.

At present BR is discussing its conclusions with the Department of Transport and the franchising co-ordinators. A spokesman for the company said last night: 'The issues raised in the documents are now being discussed. They examine the possible implications of the present government policy.'

A Department of Transport spokesman said: 'There is a working group, comprising of BR, the DoT and advisers, who are looking at passenger revenue allocations and ticket arrangements.'

In April the Government proposes to set up a company, Railtrack, to control the track and signals, while leaving the rail service to BR. The national track system will be split into several areas and seven of them will be run separately by BR as 'shadow franchises' to build up a trading record in preparation for the sell-off.