Railtrack's successor pleads for extra subsidies to run network

The not-for-profit company set up by the Government to take over from Railtrack is asking for billions of pounds in extra subsidies.

Tom Winsor, the rail regulator, said yesterday he had agreed to review the access charges Network Rail could levy on train operating companies. Network Rail, due to take over the network next Thursday, has already been given a £21bn financial cushion by the Government. But this will mostly end in September 2004 and there are concerns it will be unable to maintain and upgrade the network after that without a new deal.

The company says it will need £13.7 in access charges, £3.6bn more than Mr Winsor granted Railtrack for 2001-04.

Mr Winsor insisted the review would not necessarily lead to a substantial rise in subsidies. "This is all about getting a grip, not letting rip," he said. If extra money was needed, it would come from the public purse rather than fare increases.

Mr Winsor said the review was needed because of Railtrack's overspending and inefficiency, which had saddled its successor with higher costs. The upgrade of the west coast main line from London to Scotland alone is forecast to cost up to £13bn, compared with an original estimate of £2.6bn. The cost of day-to-day maintenance has also soared since the Hatfield disaster in October 2000.

Mr Winsor said the review would set new targets for Network Rail on efficiency, safety, reliability and punctuality. If those were not met, executive pay would be cut.

Richard Bowker, chairman of the Strategic Rail Authority, welcomed the review, saying: "This is another important step forward for the rail industry. It clears the way for getting to grips with the costs of Britain's rail infrastructure."

Stewart Francis, chairman of the Rail Passengers Council, also backed the move, saying: "Hatfield and its aftermath revealed the true cost of running the current rail network. We now need to stand back and work out what it really costs to run a safe, well-maintained and intensively used rail network – there can be no more of trying to do it on the cheap."

Alistair Darling, the Secretary of State for Transport, is due to go to the High Court tomorrow to begin the process of taking Railtrack plc out of administration so that the £500m sale of the company to Network Rail can go ahead.

Outlook, page 25