Railtrack hit by £100m in crash claims

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RAILTRACK will tomorrow reveal that it faces a £100m compensation bill for last month's Hatfield rail disaster, wiping out more than half of its annual profit.

RAILTRACK will tomorrow reveal that it faces a £100m compensation bill for last month's Hatfield rail disaster, wiping out more than half of its annual profit.

Railtrack is expected to pay the train operating companies for the disruption caused by the crash, and the network-wide chaos caused by the emergency repairs that followed. It will also compensate the families of the four victims.

The total is not yet fixed, as the question of who pays is still the subject of heated debate between Railtrack and the train operators who argue that they are in no way liable.

There is also a dispute between Railtrack and civil engineers such as Balfour Beatty about who should pay for repairs.

However, the figure will be substantially more than the City had been expecting, and will wipe out the majority of Railtrack's half-year profits, which are also going to be announced tomorrow and are expected to be around £165m.

Gerald Corbett, Railtrack's chief executive, is likely to come under further fire over how the rail network operator has reacted to the rail crash, when a London-Leeds express was derailed at high speed.

Last week, he said the rails had been damaged by heavier goods trains running on wheels not sanctioned by Railtrack. This brought an angry response from freight train operator, English, Welsh and Scottish Railways, whose chief executive, Philip Mengel, accused Mr Corbett of "putting up a smokescreen" and issuing a "factually incorrect statement".

Railtrack has had to make emergency repairs to all its high-speed train links and bring forward planned maintenance for large parts of the rail network. This led to the closure of important lines, notably the East Coast line, which only re-opened last week. Many train operators are running emergency timetables and the rail network has descended into anarchy. Though Railtrack claimed that the service would be back to normal by Christmas, it is now expected that the disruption will continue until Easter.

Mr Corbett has come under pressure from MPs to resign and is understood to have told John Prescott, the deputy Prime Minister, that he would be willing to go if that improved matters. However, the problems of finding a replacement have been among factors that led to the offer being rejected.

Railtrack has drawn up contingency plans if Mr Corbett were to resign, which would involve Sir Philip Beck taking on much of his responsibilities. However, Sir Philip is himself under pressure from investors unhappy with Railtrack's performance. Its shares have fallen by more than £2 to less than £10 in the past month.

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