06 June 2003
Rail regulator Tom Winsor has admitted that he will find it more difficult to hold the public interest company Network Rail to account than he did its private sector predecessor Railtrack.
Speaking on the launch of his 2003/04 business plan on June 2, Winsor said it would be 'very difficult to incentivise' Network Rail.
This is because its board members are not shareholders, and so would not be directly hit by fines imposed on the company, Winsor explained. 'With Network Rail, a key area of accountability, the shareholders, has gone and it's harder to regulate the company.'
He strongly hinted that Network Rail would face an uphill struggle to gain agreement for the £27.8bn that it hopes to spend over the next three years. This is almost £12bn more than budgeted, an 'explosion in costs' it would have to justify in the coming months.
Winsor said: 'We are very concerned with the forecasts that Network Rail is making in relation to activity and costs, and these will have to be thoroughly justified.'
He must decide by the end of the year how much Network Rail may charge train operators for using its tracks.
Winsor warned Network Rail that it must succeed where Railtrack failed and 'deliver on its committed projects and provide railway infrastructure that meets [customers'] needs'.
It must also make progress on its asset register – an inventory of the state of the rail system that has never previously been compiled.
Railtrack senior management had 'thrown it all away' and 'panicked' after the Hatfield crash, he said.
A Network Rail spokesman said: 'We largely agree with what the regulator has said. It is absolutely right to say cost reduction must be our main priority. We have to make massive efficiency savings.
'We've got to hold our hands up and say our performance is not good enough, but broken rails and train speed restrictions have been reduced.'
PFjun2003
