Setbacks as Network Rail gets £22.2bn for next five years

Network Rail is to get £22.2 billion to run the railways over the next five years, Rail Regulator Tom Winsor announced today.

But while signalling a major advance on the £15 billion originally allocated in 2000, Mr Winsor also put a brake on the key London to Scotland West Coast Main Line modernisation.

He allowed Network Rail (NR) £640 million less than originally budgeted for the modernisation and said post-2005 work should be put back 18 to 24 months to save money.

The 2004 and 2005 plans for the line should go ahead, which will mean Virgin reducing journey times by running high-speed tilting trains on the line from September 2004.

But, to Virgin's disappointment, post-2005 work on speeding up the line between Rugby and Stafford will be put back two years.

Although Mr Winsor's settlement represents a £7 billion rise in the cost of operating, maintaining and renewing the railways, the final figure is well below the £35 billion NR originally asked for.

It is still more than was allocated for rail by the Government in its 10-year plan.

Mr Winsor said he expected NR to help improve the punctuality and reliability of the railways, as well as meet targets for reducing the delays to services for which it can be held responsible.

He said NR had inherited a poor legacy from its predecessor company Railtrack but now had to get its own act together.

Just how much of the £22 billion comes from grants to NR from the Strategic Rail Authority (SRA) and how much from track access charges paid by passenger train companies is still to be sorted out.

Eventually it will be the taxpayer who pay, as train companies are indemnified against any increase in track access charges.

There has been something of a battle between the major players in the rail industry and Mr Winsor over the West Coast line and the whole funding issue.

The Rail Passengers Council, while welcoming the new financial settlement, said that "one fat controller was better than two thin ones".

Louise Ellman, Labour MP for Liverpool Riverside, said: "We cannot have the West Coast Main Line's fate dancing between the SRA, NR and the Rail Regulator, while the travelling public are left in confusion".

NR said Mr Winsor's targets were "extremely challenging" but that it recognised the need for improvements.

The Association of Train Operating Companies said Mr Winsor had "got the balance right".

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