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Railhub Archive 2001-03-13 RTK-001 Railtrack Group plc0
Railtrack' s response to the SRA strategic agenda
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Railtrack' s response to the SRA strategic agenda _______________________________________________________________
type Press release
Railtrack welcomes the publication today of the Strategic Agenda by the Strategic Rail Authority (SRA).
The Strategic Agenda clearly endorses the principle that Railtrack should own and operate the entire rail network. Railtrack, in common with the majority of rail industry participants firmly believes that the highest levels of safety, efficiency and reliability can only be achieved with a single network operator.
The Strategic Agenda focuses upon enhancement, future investment and the delivery of major projects. Railtrack's approach to the management of its business activities is already broadly consistent with that set out by the SRA, with the core operations, maintenance and renewal activities being managed separately from the major projects group.
Currently all enhancements are wholly resourced, financed and managed by Railtrack. However, given the proposed scale of investment going forward Railtrack believes that a more participative approach is necessary. It has made it clear in a number of public fora that the Company accepts there is a wide range of alternative models for delivering enhancements.
It is also fully recognised by all parties that the operation and maintenance of the rail network is inextricably linked with the enhancement and upgrade programme, unless it is a green field site. Renewal of the existing infrastructure can make up over 60% of a typical major enhancement project. It is therefore inevitable that Railtrack will continue to have an ongoing involvement in all network upgrades, with other partners contributing skills and resources as appropriate and taking a significant proportion of the risk. The degree of involvement by Railtrack in terms of managerial and financial control and the allocation of risk are expected to differ on a project-by-project basis.
As the SRA states in its document there is clearly a great deal of detailed work to be done to convert these ideas into structures and to flush out all of the issues. As yet Special Purpose Vehicles (SPVs) are unproven as a financing vehicle for the sharing of risks on the operating railway. Railtrack is currently working with its customers to develop the first Special Purpose Vehicle for the South Central re-franchising.
There are a huge number of other constraints facing the industry. These industry wide challenges include the availability of risk capital and financing (including Railtrack's), the ability to cost effectively gain access to the network (possessions), the growing constraints on the industry supply chain, the timing of the re-franchising and the sheer size of the industry's current agenda. Ambition and realism are called for in equal measure.
Commenting on the Strategic Agenda, Railtrack's Chief Executive, Steve Marshall said;
'Railtrack looks forward to working in a public private partnership with the SRA to deliver a safer, better and bigger railway system. There is a huge amount of work to do to establish in detail how this can be achieved more effectively and we are up for it.
'Railtrack has an essential and irreplaceable role to play in the development of the rail network, but we cannot and will not try to do it on our own. Given the scale of the upgrades proposed Railtrack has already recognised the need to work with other parties and is leading the first project to do just that'
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Notes to Editors
At the time Railtrack announced it was accepting the ORR regulatory determination, which comes into effect on 1 April 2001. It also noted the need for resolution of certain issues relating to deferred Government grants. These deferred grants represent in excess of £1 billion of revenue, which the Regulator has agreed that Railtrack needs to spend on the rail network.
The Company is currently in discussions with the Strategic Rail Authority and the DETR over the timing of such revenue grants. As previously stated while these discussions are continuing Railtrack will make no commitments to new enhancement schemes. If no resolution of these issues is achieved by 31 March 2001 then Railtrack could apply to the ORR for an early interim financial review.
For more information please contact the Railtrack press office on 020 7557 8292/3.
All recent press releases can be found on the Railtrack web site www.railtrack.co.uk/corporate
Railhub Archive ::: 2001-03-13 RTK-001
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