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1997-06-05 ORR-001
Office of the Rail Regulator

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Regulator voices concern at Railtrack financial results


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Office of the Rail Regulator
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Office of the Rail Regulator

Regulator voices concern at Railtrack financial results
_______________________________________________________________


date
5 June 1997
source Office of the Rail Regulator
type Press release

note ORR/97/11


The Rail Regulator, John Swift QC, today voiced concerns at Railtrack's financial results for 1996-97 which were published today.

Mr Swift said, "The performance regime, which I approved, has benefitted passengers and demonstrates that the structural division between the infrastructure and train operations has worked. However, I am concerned firstly that the improvement in day-to day- performance may be costing funders of railway services too much, and secondly that there is still a very long way to go for Railtrack to deliver on its investment obligations and thus secure the longer term health of the network."

He explained, "The significant improvement in operational performance is reflected in financial benefit to Railtrack from the operation of the performance incentives agreed in contracts with train operators. The results show that Railtrack is £87 million ahead of the position assumed at the time the supplement on access charges to cover the cost to Railtrack of operating performance incentives was agreed.

"I will therefore want to establish whether the arrangements are offering value for money for funders and train operators and to be satisfied that the money allowed for in access charges is not providing disproportionate benefits to shareholders.

"As I said in my January statement of objectives for Railtrack, I expect this year to review the operation of these contractual performance regimes to see whether they are operating in the public interest. I will now be bringing forward this review with Railtrack, train operators, funders of the railway and user representatives to begin immediately.

"On investment, although Railtrack have made some progress towards making up the shortfall of expenditure I warned about earlier this year, they still have a long way to go before I can be satisfied that the long term health of the network is assured. This demonstrates the necessity of

the moves I announced two weeks ago to strengthen the obligations in Railtrack's licence to make it more accountable to me for delivery of its plans and a measurably better railway. I am currently in discussion with Railtrack about these licence amendments and expect a positive response from them."

Mr Swift concluded, "These record profits show that Railtrack has funds available to invest in the network. It still has a very long way to go to deliver on ambitious plans and to make good the £400 million backlog on property spending, and the £277 million shortfall on track and structure renewals, which still remain. That is why I want to see increased public accountability for stewardship of the network."


Railhub Archive ::: 1997-06-05 ORR-001





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