Office of the Rail Regulator

Rail Regulator launches enforcement action against Railtrack
_______________________________________________________________

date 19 August 1999
source Office of the Rail Regulator
type Press release

note ORR/99/34

The Rail Regulator, Tom Winsor, has today announced his intention to make an enforcement order requiring Railtrack to improve its network performance by reducing the minutes delay per passenger train that Railtrack cause by 12.7 per cent in the year ending 31 March 2000.

If Railtrack fails to achieve the 12.7 per cent target, the Regulator has announced an intention to impose a penalty on Railtrack of £4 million for each percentage point of the shortfall. This could result in penalties of :

over £40 million if Railtrack only achieves the same rate of improvement as last year;
around £20 million if Railtrack achieves this year's target of 7.5 per cent but fails to catch up any of last year's shortfall; and
around £10 million if Railtrack achieves this year's 7.5 per cent target and half of last year's shortfall.
Commenting on his intention to make an enforcement order, Tom Winsor said: "Today's action is the first step in the enforcement process. Its objective is to secure compliance with Railtrack's network licence obligations. There is nothing remarkable in my demanding that Railtrack meets its existing obligations. Companies in the private sector which are in violation of their legally binding obligations expect enforcement action. This action is no different.

"Passengers have been waiting far too long for better performance from the railway. They have heard numerous statements of good intentions, and promises of jam tomorrow. The time has come to take action to make the privatised railways treat the travelling public with the same respect as they treat their shareholders.

"In taking this first step towards making a final enforcement order, including a monetary penalty, it is important that Railtrack, the industry and the public realise that all I am requiring Railtrack to do is to comply with its existing obligations. This order does not impose new obligations, and it does not enlarge on what Railtrack already has to do. Railtrack's record in this area sofar is poor, and I have decided I must act now. I would be letting rail passengers down if I allowed licence obligations to be broken with impunity, or watered down because they are inconvenient.

"My objective is to secure that Railtrack complies with its licence obligations. That is also why I intend the monetary penalty will be a graduated one. This means that the closer Railtrack gets to meeting its performance targets, the lower the monetary penalty will be. If it achieves the targets there will be no penalty. I earnestly hope that Railtrack achieves those targets, because that is the way in which the public interest will be best served."

The Regulator will hold a press briefing at 10am on Thursday, 19 August to launch this enforcement action. This will be followed by a briefing for analysts starting at 11am.

Notes for editors:

1. Today's action is the first step in the enforcement process under section 56 of the Railways Act 1993. It is not the making of the final order. A period of consultation, lasting until 30 September 1999, now takes place. In that period, Railtrack and others have the opportunity to comment on the proposed order. In that light of the responses to consultation, the Regulator will make his decision on the enforcement action which will be taken.

2. A copy of the Regulator's foreword to the notice under section 56 of the Railways Act 1993 is attached. Copies of the full notice can be obtained from the ORR.

3. Condition 7 of Railtrack's network licence requires it to carry out its licensed activities 'so as to satisfy the reasonable requirements of train operators and funders'..........'to the greatest extent reasonably practicable, having regard to all relevant circumstances including [its] ability to finance its licensed activities.'

Railhub Archive ::: 1999-08-19 ORR-001