Railtrack pays Virgin Rail £106m for track delay

A dispute broke out yesterday over how much state aid may have to be paid out for Railtrack's failure to upgrade the flagship West Coast Main Line.

The Strategic Rail Authority (SRA) said that Virgin Rail would receive a total of £106m from taxpayers, but the transport giant Stagecoach calculated that another £230m to £465m could be provided on top.

A spokesman for the SRA said the figures released from Stagecoach, which owns a 49 per cent stake in the Virgin Rail Group, were "nonsense".

One source at the authority said the figures from Stagecoach were "as close to a lie as you can possibly get". They were predicated on further delays for which no financial calculation had been made.

The authority official said the £106m figure had been agreed to head off endless and possibly pointless litigation between Virgin, which runs West Coast and CrossCountry services, and Railtrack which was in administration and due to be replaced by the "not for dividend" Network Rail.

The West Coast upgrade delays have hit plans to introduce high-speed tilting trains which should cut journey times on the London to Scotland route.

Virgin had hoped to start passenger services of the Italian-designed Pendolino tilting trains in May this year. They would have run at up to 125mph initially and at 140mph in 2005.

But delays to the £7bn upgrade have meant the trains will not start passenger services until this autumn and then they will only run between London and Manchester rather than all the way to Glasgow and they will not operate in "tilt mode".

The trains will not run in tilt mode until next May and even then they will only travel at 110mph. Virgin Rail hopes that 125mph tilt running will start in October 2003.