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2001-04-02 DET-001
Department of the Environment, Transport and the Regions

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Prescott unveils £7.5 billion rail boost under 10 Year Plan


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Department of the Environment, Transport and the Regions



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Department of the Environment, Transport and the Regions

Prescott unveils £7.5 billion rail boost under 10 Year Plan
_______________________________________________________________


date
2 April 2001
source Department of the Environment, Transport and the Regions
type Press release

note News Release 202


Deputy Prime Minister, John Prescott, today announced a £7.5 billion package of rail measures on the first working day of the Government's 10 Year Transport Plan and set out a new relationship between the Government and Railtrack. The package represents a down payment as part of the £60 billion provision for rail in the Governments £180 billion 10 Year Plan.

John Prescott confirmed that Railtrack would receive a £1.5 billion advanced payment in return for increased accountability and a change in the company's role. Railtrack will now concentrate on the maintenance of the existing network, improving safety and the service for passengers - with other partners helping to expand the network.

John Prescott said:

"Today marks a fresh start for our railways. Since Hatfield it has been clear that Railtrack needs to concentrate more on its basic job - making the existing railway better and safer.

"Today I can confirm that we are bringing forward some £1.5 billion to strengthen their ability to do just that. But we are attaching strict conditions - more accountability and tougher regulation in the public interest.

"Other companies will now be involved in public private partnerships to finance and deliver expansion on our railways. And there will be a new Public Interest Director on the Railtrack Board as a powerful voice for the public."

As part of the agreement with Government, Railtrack has undertaken to:

spend the money strictly on improving the railway;

intensify its efforts to ensure the strongest focus on its responsibility for the core network, and on the needs of its train operator customers, working closely and constructively with the Rail Regulator and the Strategic Rail Authority;

take an active and co-operative role in the joint venture companies to be set up to take forward major expansion projects, starting with the East Coast Main Line;

to appoint, in consultation with Government, a non-executive director to its main Board with a specific remit to provide a powerful public and consumer interest voice.

John Prescott applauded these commitments as the cornerstones of a new relationship between Government and Railtrack. He commented:


"The strengthening of the Railtrack Board demonstrates the company's recognition of its special public role. It will play a vital part in our work to modernise Britain's railways.

Today also marks the beginning of the Rail Regulator's new five-year regime for Railtrack, bringing in new incentives for good performance. He has proposed seven new licence conditions to strengthen public accountability.

To drive forward the re-franchising programme, the Deputy Prime Minister today also welcomed the SRA's announcement that Stagecoach have been appointed preferred bidder for the new South West Trains franchise, which will run for up to 20 years. This will mean earlier replacement of the remaining slam door trains. Stagecoach envisage a 25% increase in capacity over the next three years, and they are looking at double decker trains into Waterloo to tackle the current overcrowding.

The East Coast Mainline will benefit from the first of the new partnership projects announced today, to deliver a major upgrade of the line between London and the North, bringing a capacity increase of more than 25%.

To assist the SRA in delivering the 10 Year Plan targets, the Government is to provide it with an extra £155 million over the next two years.

Finally, the Deputy Prime Minister today gave the go-ahead to the funding and construction of the second and final stage of the Channel Tunnel Rail Link from North Kent to London's St Pancras Station, due to be completed in 2007. The agreement provides for Railtrack to be the operator of the line, but for the construction of Section 2 to be under a new public private partnership with London Continental Railways and Bechtel.

John Prescott concluded:


"Today we are driving forward the 10 Year Plan and moving to complete the fast link to Europe. This package illustrates the long term decisions and investment that this Government has been prepared to tackle."

Notes to Editors
1. Details of the steps being taken on the East Coast Main Line, South West Trains and Chiltern Railways are contained in press notices being issued today by the Strategic Rail Authority.

2. Details of the Statement of Principles agreed today with Railtrack are attached.

3. In addition to the rephasing of grant, the Government has agreed to pay Railtrack the difference between the amount of freight income allowed for the next five years in the Regulator's final conclusions in October 2000 and the amount of freight income proposed by the Regulator at the conclusion of his freight review expected to be later this month. This will avoid the need to increase passenger access charges to compensate for any shortfall.

4. This news release has been prepared for general information purposes only and is not intended to form the basis of any investment decision or constitute an offer to acquire shares in any company. The distribution of this news release in other jurisdictions may be restricted by law and therefore persons into whose possession this news release comes should inform themselves about and observe any such restrictions.

5. Any financial assistance to be given by the SRA to Railtrack Plc by way of grants or through its involvement in the proposed new project finance and delivery vehicle for the East Coast Main Line upgrade may require the approval of the European Commission, as a state aid.

Press Enquiries: 020 7944 3108; out of hours: 020 7944 5925 / 5945;
E-mail: press@dtlr.gov.uk
Public Enquiries: 020 7944 3000


Railhub Archive ::: 2001-04-02 DET-001





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