Railtrack is lined up for quick pounds 3bn sell-off

Click to follow
The Independent Online
RAILTRACK, the publicly- owned company which owns the railway track and infrastructure, looks set to be added to the list of assets for rapid sale under the Government's renewed enthusiasm for privatisation.

The Treasury, which has its sights set on Railtrack's assets, valued at pounds 6.5bn, is examining the potential for a quick sale which is in line with the thinking of Railtrack's chairman, Bob Horton, who has been pushing the Department of Transport to sanction a sale by 1996, before the next general election. The sale price is likely to be half the value of the assets, about pounds 3bn.

The privatisation programme was given new impetus last week when plans for the proposed sale of the Post Office were revealed and today Michael Heseltine, the President of the Board of Trade, will publish plans to sell off the air traffic control service.

Mr Horton wants Railtrack privatised to free him of the investment constraints imposed by the Treasury to enable the railways to obtain the substantial investment they require. Critics ask how the money could be raised at private sector rates of return without massive fare increases.

The sale of Railtrack is also fraught with difficulties as the rail privatisation process is still in its very early stages. In April, when Railtrack was created, the railway was separated into 25 franchise areas and the first six are not due to be offered to the private sector until the end of next year, 18 months later than originally planned. If Railtrack were offered for sale during this period, it would create even more uncertainty for potential franchise bidders.