The Government's target of privatising half of British Rail train services by next April looks like being abandoned after it announced that the planned sale of the West Coast main line had been delayed.
In a major blow to users of the line, which is long overdue for refurbishment, a scheme to raise pounds 1bn to modernise it has been shelved until after Railtrack is privatised next year. As a result, any hope of franchising out services in time for the April deadline has evaporated.
Michael Meacher, Labour's transport spokesman, said the delay was a serious blow to government plans to inject private capital into the railways.
He said it meant 1960s trains and equipment would remain in use until well into the next decade because new signalling would take at least eight years to plan and install. According to Mr Meacher, the decision to postpone the scheme was made at a meeting between John Welsby, chairman of British Rail, and Sir George Young, the Secretary of State for Transport.
He said there was also a dispute over the length of the proposed franchise for the West Coast. Railtrack wanted a guarantee of track access charges of at least 15 years to allow it to raise private finance for the scheme, while the Government had indicated it wanted seven-year franchises. John Swift, the Rail Regulator, has said he can only guarantee the level of charges for seven years.
Without the West Coast, and without Scotrail, another proposed candidate for early franchising which has been delayed as a result of a dispute with Strathclyde Regional Council, which funds many services in the Glasgow area, ministers have no hope of meeting the target of franchising out 51 per cent of the railway set by John MacGregor, the then Secretary of State for Transport, last summer. Roger Salmon, the franchising director, who is in charge of franchising out services, has always said that the target is a very challenging one and privately expressed doubts to ministers about it being met.
Last night the Department of Transport reiterated that there was no change to its privatisation timetable.
But an industry source said yesterday that the Government's target could not possibly be met.
"The first three franchises representing 20 per cent of the railway are expected to be let later this year and tender documents for the next four, representing about 25 per cent of the railway, are due to be published next month but cannot be let in time for the April 1996 deadline."
Mr Salmon said yesterday that privatisation of two other franchises is being speeded up.
The successful flotation of Railtrack is dependent on at least some franchises being in the private sector as they will have an assured set level of subsidy from the Government, while subsidy to those still in BR's hands will not be guaranteed.
Mr Meacher said: "This news represents a humiliating defeat for the Tory government and a triumph for Labour's campaign to keep the railways in public hands."Reuse content