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Thursday, 11 October, 2001, 16:54 GMT 17:54 UK
Railtrack pushes for rail link deal
Railtrack chairman John Robinson
Robinson: demanding control of key asset
Railtrack has upped the stakes in its battle with the government over the collapse of the company.

Executives say Railtrack plc's parent company, Railtrack Group, will also collapse unless ministers give it immediate control of the Channel Tunnel Rail Link.

If Railtrack Group collapsed shareholders would be left without a penny.

The move is part of Railtrack Group's ongoing battle to claw back its assets after the government pulled the plug on funding and had a court appoint administrators for Railtrack plc, which owns 23,000 miles of track and 2,500 stations.

Most valuable asset

Railtrack says the high-speed line between London and the channel tunnel is the group's most valuable asset apart from the national railway network, and is worth about 400m, or 75p per share, for investors.

Railtrack Group chairman John Robinson said: "If these issues are not resolved immediately, the financial solvency of Railtrack Group will be imperilled with profoundly damaging consequences for Railtrack's shareholders."


At a stroke, Labour has put at risk the trust of the private sector. They have imperilled the billions of pounds in private sector finance needed to reform and repair Britain's crumbling public services

Michael Howard, shadow chancellor

The government agreed on Wednesday that Railtrack would be given access to 370m in assets frozen by the company's bank as part of the administration process.

This will be divided up amongst shareholders once a new, not-for-profit trust has been established to take over track and signals from Railtrack.

City backlash

Meanwhile Railtrack shareholders in the City have swung in behind the Railtrack group's board of directors, giving full backing to their efforts to secure a fair payment for shareholders.

They have written to the government warning of possible legal action over the decision to put the company into administration.

Railtrack has also criticised the transport secretary Stephen Byers, accusing him of prevaricating over the group's request for an urgent meeting for further talks.

Loss of confidence

The Railtrack debacle has put a question mark over the government's much-vaunted campaign to increase private funding of public services.

Shadow chancellor Michael Howard said: "At a stroke, Labour has put at risk the trust of the private sector.

"They have imperilled the billions of pounds in private sector finance needed to reform and repair Britain's crumbling public services.

"Capital markets are now learning that they cannot trust the government."

He added: "The shareholders in Railtrack, who include thousands of workers in the industry and thousands more pensions, have had their shares confiscated.

"This is a return to Old Labour at its worst.

"What appeared to be a carefully-staged coup by Labour ministers is now in disarray and threatens the future of public service funding."

 WATCH/LISTEN
 ON THIS STORY
The BBC's Stephen Montague
"The government say they're bemused"

Key stories

Background

Safety crisis
 VOTE RESULTS
Should Railtrack's shareholders be compensated?

Yes
 33.04% 

No
 66.96% 

4719 Votes Cast

Results are indicative and may not reflect public opinion

See also:

09 Oct 01 | Business
Profile: The Railtrack salvage squad
08 Oct 01 | Business
Rail users promised 'fresh start'
08 Oct 01 | Business
Railtrack in administration
05 Aug 01 | Business
Railtrack may axe managers
02 Aug 01 | Business
Railtrack operations chief axed
23 Jul 01 | Business
Railtrack funding under threat
24 May 01 | Business
Railtrack reports massive loss
07 Oct 01 | Business
Railtrack privatisation 'flawed'
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