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Railhub Archive
1999-11-25 RTK-001
Railtrack plc


Railtrack response to the Rail Regulator's stewardship of the network document

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Railtrack plc

Railtrack response to the Rail Regulator's stewardship of the network document

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1999-11-25 Railtrack regulation (Office of Rail Regulation)


25 November 1999
source Railtrack plc
type Press release

Railtrack totally accepts the need to improve its asset management and responsiveness to customers and it has already put in place a whole series of measures to address these issues. Track quality has improved in the last three years, and the number of broken rails in the first eight months of the year has declined following a series of mitigation measures. The development of an asset register is underway having been postponed due to the need to prioritise year 2000compliance.

We have no objection in principle to licence modifications which clarify our obligations in these areas. However, we take issue with what we see as a partial and unbalanced perspective of our record as steward of the network.

A balanced perspective should also acknowledge the successes:

* the network has accommodated a 25% increase in passenger miles and 35% increase in freight tonne miles (an extra 1000 trains a day)
* a doubling of investment since privatisation to £2 billion this year
* a 50% reduction in infrastructure related delays
* a decrease in subsidy per passenger mile of 41% since 1995/96

The Booz Allen Report is inevitably written with the benefit of hindsight. It covers the five year period, the first two of which Railtrack was subject to public sector financial constraints which was when track quality deteriorated. The challenges of the fragmented newly privatised railway with many more relationships to manage, the sudden growth in demand for passenger and freight, and higher customer expectations are factors which place the report in context.

Booz Allen also acknowledges the progress the company has made in developing processes to drive performance improvements; new contracts with suppliers and considers that we have exceeded prior expectations in terms of productivity.

The present access charges were set in 1995 at a level which has proved to be inadequate to meet the needs of renewing the network and making good the backlog of under investment under British Rail. By 2001 Railtrack will have exceeded expenditure expectations by almost £2 billion.

For these reasons we do not accept that we have underdelivered against the expectations made when access charges were set. No one expected a 50% improvement in train performance, a 25% increase in passenger train miles or more than a doubling of investment.

We too want to see changes to the framework of regulation to improve clarity over our obligations and the outputs we are expected to deliver within a strong incentive framework with rewards for where we outperform. We are concerned that the present approach by the Regulator is asymmetric - penalising us where we do not deliver while failing to acknowledge better than expected performance in other areas.

Gerald Corbett, Chief Executive, said, 'We want to workconstructively with the Regulator to improve the current framework and develop a proper incentive regime which will better enable us to meet the requirements of our customers,and the wider public interest. There is nothing more important than meeting our public service obligations.'

Railhub Archive ::: 1999-11-25 RTK-001


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