Parliament and Politics: Rail privatisation may herald legal minefield: BR chairman still 'deeply concerned' at proposals

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THE RAILWAYS could become a lawyers' paradise in the event of disputes between the players brought into the system by privatisation, the Commons Transport Select Committee was warned yesterday.

Sir Bob Reid, the chairman of British Rail, who strongly criticised the privatisation plans in a radio interview before Christmas, said he was still 'deeply concerned' about some aspects of the proposals and remained sceptical of the Government's 'very short' timetable for implementation.

Of the Bill, due for a Second Reading next Tuesday, he said: 'It's workable, certainly. But there will have to be a lot of hard work to make it work.' He said the 14,000 contractual arrangements within BR would each have to be defined by legally binding contracts after privatisation: 'At the moment in the present integrated structure, people will do what they are told.' However, he said BR would be moving from a management environment into a legal environment under the plans, which involve separating the running of the trains from the track and offering franchises to the private sector.

He warned that under privatisation, which the Government hopes will start by mid-1994, the right climate between the new operators and new bodies such as the Franchise Authority and the Regulator would have to be engendered to ensure that people did not ring their lawyers whenever a dispute arose: 'If people are standing on the platform waiting for these conflicts to be resolved, they will get rather frustrated.'

The committee is preparing a full report on privatisation following publication of its interim report last week. Sir Bob said he was happy with details that had recently emerged, such as government acceptance of the Health and Safety's Executive's 38 recommendations. But questions such as track charges and the future of freight remained unresolved.

Sir Bob was also pleased that John MacGregor, Secretary of State for Transport, had accepted that on some lines such as busy commuter routes, there would be no open access allowing new operators to be allocated exclusive franchises, and that there was a possibility that new operators would be allowed to have vertical franchises, giving them control of trains and track. These would allow the BR command structure to be retained, which he welcomed.

John Welsby, BR's chief executive, told the committee that BR investment, excluding the Channel tunnel, would halve in the next financial year, from about pounds 1.2bn to pounds 550m. In the followng two years, again excluding the tunnel, it would pick up to about pounds 750m and pounds 900m. Sir Bob said: 'This is stop-go, which is bad.' Even these amounts were under threat if revenue fell below expectations and it left BR with little potential for ordering any new rolling stock. It needed about pounds 830m investment per year to keep services at a constant level. Sir Bob said that the Government's policy of wanting to encourage more freight on to rail was 'incompatible' with the financial constraints it was imposing.

Commentary, page 29

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