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Railhub Archive
1999-12-15 RTK-002
Railtrack plc


Response to provisional determination

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Railtrack plc

Response to provisional determination

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15 December 1999
source Railtrack plc
type Press release

Railtrack today gave an initial welcome to the Regulator's provisional conclusions on its future financial framework.

It is a detailed and wide ranging document and we shall need time to consider all its implications.

The framework proposed by the Regulator is a demanding one and there are a number of issues where we shall wish to challenge the Regulator's assumptions and conclusions.

In particular, the Regulator's efficiency targets will be extremely challenging particularly in a context of growth and development and we are disappointed that he has not yet accepted our arguments for an increase in maintenance and renewal activity in order to sustain the network.

Railtrack has been criticised for not investing enough but we have spent £1.9 billion more than allowed for in the last control period, and we are concerned the Regulator has not acknowledged the full extent of this expenditure.

A major problem with the current regime has been a lack of clarity over the outputs which Railtrack is expected to deliver and we welcome the move towards clearly defined output measures.

Equally, uncertainty over the treatment of enhancements has inhibited the development of the network and the proposed framework for treating enhancement investment appears to meet this concern.

In both these areas the Regulator's proposals bring much needed clarity and predictability to the regulatory framework.

Railtrack has always said that it does not have appropriate incentives to invest in increasing and enhancing capacity and that its incentives were misaligned with those of its customers.

The Regulator is proposing to address these issues.

This is good news for the industry and its users.

It is important that Railtrack's financial framework is sufficient to fund the investment and we need to understand the full implications of the Regulator's proposals in more detail.

However, he appears to acknowledge that a strong credit rating must be maintained to enable us to meet the major challenge of financing the growth of the network.

Gerald Corbett said, 'We will work closely with the Regulator over the coming months to ensure that we have the right financial framework. Only in this way will we be able to fund the expansion of the network and meet the aspirations of all our stakeholders.'

The Company is also making an announcement today about the modernisation and upgrade of West Coast Main Line.

For more information please contact the Railtrack press office on 0171 557 8292/3

All recent press releases can be found on the Railtrack web site at the following address: http://www.railtrack.co.uk/corporate/notice

Railhub Archive ::: 1999-12-15 RTK-002


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