Railtrack has this morning received the ORR conclusions on the periodic review of Railtrack's access charges. This is a complex determination and the Company will need time to study fully the implications, however, Railtrack welcomes the financial commitment to the railway which has been outlined today.

The Regulator has listened to our concerns in a number of areas and we acknowledge progress. However, there are several issues which we believe require further attention, in particular the efficiency target and the performance and possession regimes. These are still very stretching given the demanding agenda that the company must deliver.

The efficiency target requires Railtrack to take out some 17% of the total cost base over the five-year control period. On the performance and possessions regime the key assumptions made by the Regulator are demanding and the whole industry needs to look at these in the context of the massive agenda which the industry faces, recognising that safety is the number one priority for all concerned.

Following the Hatfield tragedy, the company has taken the precautionary measure of implementing speed restrictions at sites across Britain until track renewal can be carried out. This will result in higher penalty charges payable to the Train Operating Companies for the late running of trains and increased operating expenditure to cover the cost of renewals. This will clearly have an impact on the level of profit in the financial year ending March 2001. However, the size of the impact has yet to be quantified.

The Hatfield tragedy has highlighted the huge pressure which faces Railtrack and the industry in terms of operating an ageing infrastructure which has suffered from years of under-investment, growing passenger and freight traffic, and a regulatory regime which has focused heavily on performance targets. The industry has recognised that a new approach will be required to achieve the necessary improvements in safety and will be tabling proposals at their meeting on Wednesday. The regulatory review has to be considered within this context.


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Railnews Archive ::: 2000-10-23 RTK-001