Thursday, November 4, 1999 Published at 06:27 GMT
Business: The Company File
Railtrack profits spark anger
Railtrack has announced profits of more than £1m a day, prompting attacks over its investment in safety following the Paddington crash.
Campaigners immediately demanded more cash be ploughed back into improving the national railway infrastructure.
"Railtrack says it has to make big profits to fund big investment. But the truth is that Railtrack has been strong on public relations and promises, but weak on delivery."
Railtrack's profit level, at a time of growing unrest about the quality of rail services, would have caused controversy even before last month's Paddington crash, which claimed 31 lives and injured 245.
Since the accident, it has been the subject of bitter attacks over the quality of signalling safety systems.
But Railtrack said its 10-year £27bn investment plan was not enough to maintain the nation's network.
Chief executive Gerald Corbett told BBC Radio 4's Today programme it was an "uncomfortable fact that we need the money to invest".
He said the company had inherited a "legacy of massive underinvestment", but said its spending was twice what British Rail's had been when it had responsibility for the rail network.
Citing improvements in train delays, Mr Corbett admitted it had missed its target by 5%, but said it had raised standards by 2%.
He also said track quality would be back up to scratch by 2001.
The company's chairman Sir Philip Beck said he recognised news of the profits may be "interpreted as insensitive" to relatives of crash victims.
"I and my board colleagues believe that safety is the cornerstone of our industry and a pre-condition to improving train performances and increased investment."
The rail infrastructure company made a pre-tax profit of £224m for the April-September 1998 period, while its full-year 1998-99 profit was £428m.
This record figure was announced in May, coinciding with Railtrack's admission that it had failed to meet a set target for reducing train delays.
'Rebuild public trust'
Such delays have since improved, but the company faces a penalty of as much as £40m from rail regulator Tom Winsor if tougher targets are not met next year.
And it may have its responsibilities for safety stripped away as a result of the Paddington crash.
Deputy Prime Minister John Prescott has said he is "minded" to transfer Railtrack's safety and standards directorate to a new, independent body, depending on the disaster inquiry's results.
The accident happened when a Thames train, which had just left Paddington bound for Bedwyn in Wiltshire, passed through a red signal at Ladbroke Grove in west London.
It collided with a London-bound Great Western express from Cheltenham in Gloucestershire.
Railtrack chief executive Gerald Corbett has admitted that public confidence in the railways has been "dealt a blow" by the Paddington accident and that the company was committed to helping to "rebuild public trust".
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