'Railtrack bidders must have good credit rating'

Stephen Byers, the Transport Secretary, yesterday said that any private-sector bidders for the insolvent Railtrack would have to spell out how much state support was expected and they would need a strong credit rating.

The development came as the Treasury made a further £800m available to the administrators of Railtrack, Ernst & Young, on top of the £800m announced on 17 October. The £1.6bn is short-term repayable finance to keep the company going while it is in administration.

The Government has proposed that Railtrack, which is expected to be in administration for up to six months, should be run in the future as a not-for-profit company limited by guarantee. However, the Government has also suggested that it is open to other proposals, while maintaining that its own plans would make for an "attractive successor".

At least three finance houses have been linked to a Railtrack bid – WestLB, Barclays Capital and Babcock & Brown. The administrators will consider these external offers – using the guidelines set by Mr Byers yesterday – as well as the Government plan. The final decision rests with Mr Byers.