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Last Updated: Friday, 17 October, 2003, 13:13 GMT 14:13 UK
The cost of running a railway

By Tom Symonds
BBC transport correspondent

How much does it cost to run a railway? A decent one, that is.

The man who has to answer that question is Tom Winsor, the rail regulator. And his considered (though not final) conclusion is... a lot more than is being spent now.

Here are the numbers:

Mr Winsor wants Network Rail's budget to rise from around 14bn over five years, to 22.7bn.

Kings Cross train derailment
Network Rail has to deliver genuine improvements in the overall condition of the network
Tom Winsor, UK rail regulator

Network Rail itself wanted more than 24bn, and even that figure has been radically reduced from the 34bn the company first asked for.

So who is going to have to come up with this extra 8bn? Well, that is where the arguments really start.

The problem is that the old saying "He who pays the piper, calls the tune" cannot be applied when it comes to the railways.

Standoff

Mr Winsor alone decides how much to spend, but it is the government that holds the chequebook.

Something of a standoff is going to have to be resolved.

The government cannot simply say it will not pay up. If it did, the post of rail regulator would become untenable, creating a sort of "constitutional crisis" in the railways.

But for now the Transport Secretary Alistair Darling is refusing to say he will make public money available.

That is a decision only the Chancellor will make. Instead officials at the Department of Transport are considering other options.

First of all, they are refusing to accept that the 8bn increase in the bill for the railways cannot be cut back a little.

Options

The review process has a few months to run.

One proposal is to allow Network Rail to do more of its work in big chunks - closing whole sections of major rail lines at a time.

It has been suggested that could save 750m, though the rail regulator is not quite so sure.

There is also around 5bn of the government's current transport budget that has not been spent.

But ministers do not like losing money that they have kept for a rainy day, which on the railways, can come along all too suddenly.

Jarvis

Option number three is to force Network Rail to cut even more costs.

That will be tough, it has already chopped 10bn off its proposed budget.

One development might help though. The company is to take back in-house a quarter of the maintenance work currently contracted out to the engineering firm Jarvis.

There are two sources of extra cash that cannot easily be tapped.

Train companies are protected from contributing under the terms of their contracts.

And Alistair Darling has ruled out raising fares beyond the small increases already announced, though he may consider higher fares on rail lines which have been radically improved.

So it does seem that when the government carries out its spending review next year, it will have to find more money for the railways.

Passenger benefit?

A difficult sell politically, given that half the country does not catch a train at all from one year to the next.

Even once this is resolved, passengers are being promised little more in terms of train services than they have had in the past.

Network Rail says only by the end of the decade will it be able to say fewer than one in ten trains are late.

British Rail was achieving that back in the 1990s.

At least there are many more trains services running than there have been in the past, and hundreds of trains are new.

Passengers can only hope that if these big decisions are taken now, at least some time in the future Britain's troubled train services will improve.




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