The decision to launch a major PR campaign comes just weeks after a special meeting of a Cabinet sub-committee convened to discuss the public's poor reaction to rail privatisation. The Government is trying to franchise off several rail services, and to float Railtrack, which owns track and stations.
A group of senior ministers including Brian Mawhinney, Secretary of State for Transport, the Chancellor of the Exchequer, Kenneth Clarke, and chaired by David Hunt, Chancellor of the Duchy of Lancaster, met before Christmas, providing the first evidence of Government alarm over the reception given to the sell-off.
While Government sources have denied that ministers are keen to slow the pace of privatisation or even scrap it, they concede that they are concerned about progress.
The Cabinet sub-commitee agreed that the presentation of policy had to be co-ordinated and that ministers and MPs should be provided with a timetable of forthcoming announcements in the privatisation process.
They have also been given detailed briefings to help explain and justify the sale to the Government.
Public relation industry sources said that the Railtrack contract is a separate development and standard practice in preparation for a flotation. They disputed the £500,000 figure but refused to specify another value.
The public relations world, however, is suprised that the contract is up for tender at least a year before Railtrack is due to go to the market. The move is bound to fuel Labour criticism over taxpayers' money spent on city and PR firms in the run-up to the Railtrack sale.
Companies thought to be on the shortlist include Lowe Bell - the firm chaired by Sir Tim Bell, a former adviser to Baroness Thatcher - and Dewe Rogerson.
In the run-up to the general election, Conservative Central Office is also expected to spearhead a campaign to convince the public of the virtues of privatisation in general.
Ministers will argue that the sale of companies like British Airways and British Telecom have brought substantial benefits to the consumer.
Ministers acknowledge that Labour is winning the argument over the rail sell-off.
Yesterday Labour's industry spokesman, Brian Wilson predicted rail privatisation would enter the "poll tax league" as a vote loser.
He added: "Instead of pouring still more money into communicating such a lousy message, they should pull the communication cord and stop the whole thing."Reuse content