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2001-10-09 DTR-001
Department of Transport, Local Government and the Regions

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Notes on Railway Administration Order


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railway administration



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Department of Transport, Local Government and the Regions

Notes on Railway Administration Order
_______________________________________________________________


date
[c.9 October 2001]
source Department of Transport, Local Government and the Regions
type Explanatory note



This document is intended to be used to explain the Railway Administration process.

A railway administration order is an order made under Section 60 (1) of the Railways Act 1993 (the “Railways Act”). The railway administration order has been made in the High Court and the court has appointed the special railway administrators who are officers of the Court.

The appointment follows the presentation of a petition by the Secretary of State for the Department of Transport, Local Government and the Regions (the “Secretary of State”) on one of the grounds specified by section 60 of the Railways Act, namely that:

The company is or is likely to be unable to pay its debts;

The making of a railway administration order is not the same as the making of an administration order under the Insolvency Act 1986. However, some specific provisions of the Insolvency Act are adopted.
Section 59 (1) of the Railways Act provides that during the period for which the railway administration order is in force, the affairs, business and property of the company shall be managed, by the special railway administrator;

For the achievement of the purposes of such an order;

and

In a manner which protects the respective interests of the members and creditors of the company
The purposes for which the railway administration order was granted are set out in Section 59 (2) of the Railways Act, as follows:

(a) the transfer to another company or (as respects different parts of its undertaking) to two or more different companies, as a going concern, of so much of the company’s undertaking as it is necessary to transfer in order to ensure that the relevant activities may be properly carried on; and
(b) the carrying on of those relevant activities pending the making of a transfer.

The “relevant activities” are the management of a network according to the description of the Network Licence, granted to Railtrack plc by the Secretary of State.

In effect, Section 59 imposes an obligation on the special railway administrators to keep the railway network operations running to ensure that the management of the network can be transferred to a new entity.

Immediately following the making of the railway administration order the joint special railway administrators sought and obtained an order, amongst other matters, directing them to consent to the continuation of the roles of those directors with responsibility for all safety issues.


Railhub Archive ::: 2001-10-09 DTR-001





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