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Sunday, 25 November, 2001, 13:04 GMT
More delays at Railtrack
Workmen on rail tracks
Railtrack's assets may be sold to help foot the bill
The UK Transport Secretary Stephen Byers has admitted that the collapsed rail operator Railtrack could remain in administration for more than six months.

Mr Byers blamed the delays on the discovery of worse financial difficulties than had previously been expected.

The news pushes back the start-date for new management to take over the job of the collapsed Railtrack and begin the task of revamping the UK's troubled railways.

"The administrator... is going through the assets, looking at the liabilities," Mr Byers told the BBC's Breakfast with Frost programme.

"He's actually found a situation far worse than we originally expected. So it may well take more than six months unfortunately."

Funding row

Transport Secretary Stephen Byers and the chief executive of Railtrack Steve Marshall have blamed each other for the expanding black hole in the collapsed firm's finances.

Railtrack administration
It is thought the company needs 1.7bn to pay suppliers
1.1bn for working capital
700m for financial creditors
Railtrack disputes the figures
The Department of Transport has confirmed that an extra 3.5bn - not 2.1bn as previously estimated - is needed to keep the company going over the next few months.

Mr Marshall blames the extra costs on the Transport Secretary's controversial decision to pull the plug on the company.

But Mr Byers told Sir David Frost: "That is simply not the case," and threw the blame back onto the way the firm was managed.

"Railtrack, it is worth remembering, actually wanted a blank cheque from the Government," Mr Byers said, underlining his criticism of the senior management at Railtrack.

Spiralling costs

Mr Marshall also cast doubt on the claims an extra 3.5bn was needed to keep Railtrack going.

But he said costs were always going to spiral once the decision was taken to put the company into administration.

"The suggestion that this 'black hole' has opened up and been discovered is simply disingenuous.

"The inference is that there was a black hole waiting to be discovered. The reality is that a number of things have changed since administration," he said.

Mr Byers' new hope

Mr Byers hopes to replace Railtrack with a not-for-profit company.

He says his decision had created " a golden opportunity for a new beginning," for Britain's rail industry.

But this new body will not be able to take control until after the administrators have finished their jobs.

"I think it will be a little over six months. I'm not sure it will be as long as a year," Mr Byers said.

See also:

23 Oct 01 | Business
New Railtrack will be a 'good risk'
17 Oct 01 | Business
The far-reaching effects of Hatfield
16 Oct 01 | Business
Railtrack's risky business
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