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Railhub Archive
2001-10-10 DTR-002
Department of Transport, Local Government and the Regions0
Statement by Stephen Byers on Railtrack shareholder compensation
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 Department of Transport, Local Government and the Regions
 
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   Statement by Stephen Byers on Railtrack shareholder compensation
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type Press release
On Sunday the High Court put Railtrack plc into administration. However, there is up to £370 million belonging to Railtrack Group, which is not in administration, that could be available to shareholders. My officials met Railtrack today to investigate ways in which the Government could help make some of this money available as soon as possible. The Government remains open to continuing those discussions. But at that meeting, the company also asked for additional money from public funds to value each share at £3.60p.
The fact that Railtrack plc is in administration is a consequence of its failure to manage costs over a number of years, such as the £4 billion cost overrun on the West Coast Main Line Project alone. Operating costs are £2 billion more than approved by the regulator; and poor service will result in penalties of £500 million.
The Government is committed to spending over £30 billion of public money on the rail network over the next ten years. But taxpayers'' money, which would otherwise be spent on key public services such as schools and hospitals, as well as railways, should not be used to compensate for the poor performance of private sector companies.
We will assist in identifying ways in which money belonging to Railtrack Group might be made available to shareholders but we will not provide extra funding from the taxpayer to compensate shareholders.
Public Enquiries: 020 7944 3000 DTLR website: http://www.dtlr.gov.uk
Railhub Archive ::: 2001-10-10 DTR-002
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