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Wednesday, 25 September, 2002, 10:19 GMT 11:19 UK
Network Rail 'risks cash crunch'
Train
Train operators could face higher access charges
Network Rail, the company set to take over day-to-day management of the UK railway system, faces a "significant risk" of running out of money, the industry regulator Tom Winsor has said.


There will be no increase in fares as a result of this review

Train operators
Mr Winsor's comments came on Wednesday as he announced plans to look again at the fees train operating companies pay for using Britain's railway infrastructure.

The review could result in train operators being forced to pay more in order to shore up Network Rail's finances.

But train operators said they would not pass on any rise in their access charges in the form of higher passenger fares.

"There will be no increase in fares as a result of this review," a spokesman for the Association of Train Operating Companies said.

Maintenance costs

Money raised by increasing train operators' access charges would go towards Network Rail's track maintenance budget.

"Network Rail needs to be properly funded for the competent and efficient delivery of the outputs required under its network licence and its access agreements," Mr Winsor said.

While Network Rail will be partly financed by the government to begin with, much of this support is due to lapse in September 2004.

Mr Winsor said the possible gap between Network Rail's revenues and its expenditure beyond this date could deter potential lenders.

Railtrack crisis

Network Rail is expected to take over from its failed predecessor Railtrack next month.

The government put Railtrack, a stock market-listed company, into administration in October last year rather than keep contributing towards the escalating cost of upgrading Britain's ageing railway infrastructure.

Upgrading the railway had become a priority after dozens of passengers died in the Ladbroke Grove and Hatfield train crashes.

The October 2000 Hatfield crash, blamed on a cracked rail, was the catalyst for a nationwide round of emergency repairs which brought the railway network to a near-standstill for three months.

Mr Winsor said on Wednesday that the review is also intended to take account of the change in the circumstances facing Railtrack and its successor since the Hatfield crash.

The review is expected to be complete by December 2003.


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20 Sep 02 | Business
27 Jun 02 | PM
05 May 02 | Business
25 Mar 02 | Politics
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