Return to Archive -by date - by topic - 2001
Railtrack was doomed as a normal private company for many and varied reasons, not least its management. From the start it was clear that sharpest knives in the BR corporate box either stayed to run TOCs or left in disgust. This might not have mattered had not the first chief executive carried a chip on his shoulder about BR in general and railway engineers in particular, with their irritating habit of spending money on their infrastructure. The board member for engineering who should have provided the counterbalance was expert in megaherz in trains and signalling than the impact of megatonne miles on the track. Add in the belief that the privatised BR maintenance teams would carry on doing their thing just as they always had, making supervision unnecessary, and it is clear why Railtrack progressively lost control of its underlying asset early in its brief existence
Railtrack now spins that inherited a rotten infrastructure and that there was no knowledge of the assets in the first place. This is self serving poppycock. The West Coast Main Line was handed over to Railtrack in April 1994 with no temporary speed restrictions for condition of track on the fast lines. What the record shows is that the rate of rail renewal slowed dramatically post privatisation. If the assets were so rotten why were the consultants behind Project Destiny so confident that patch and mend was the rigtt way forward.
Asset knowledge was also there, but was subsequently lost in the cracks between contractors, engineers and Railtrack. For example, installation of the Train Protection & Warning System has revealed that many signalling system data files have been taken out of the registries of the privatised BR design offices and gone missing.
While Railtrack ran down its assets, traffic levels rose. Extra traffic should have triggered increased to maintenance contractors, locked into the RT1A contacts with RPI- 3% annual price reductions. It didn't. Contractors found themselves with more work to do for less money. Similarly in signalling, where patch and mend meant that the signalling contractors ran laid off staff.
With a new Chief Executive Railtrack started to take back control of its maintenance contractors. The Office of the Rail Regulator - the Office not the man - identified the growing problems with track quality. It highlighted the lack of asset knowledge that was hampering acceptance of new traction and rolling stock . Railtrack was mildly affronted at this criticism. The affront showed that the Board no longer understood the business and its regulated environment. To be fair, that is still a common condition throughout industry.
Now the worms in the privatisation bud began to gnaw away. Southall and Ladbroke Grove highlighted the slow progress on TPWS, a 1994 project. Legislation followed to a tight timescale which Railtrack rashly accelerated for PR effect.. In the aftermath of Hatfield budgetary control of track maintenance went out of the window. One senior engineer boasted that after years of financial stringency the board would authorise any equipment he thought necessary.
While the Periodic review of track access charges gave Railtrack more income for its second five year control period starting in 2001, and an interim review brought forward another £1.5billion, expenditure was now exceeding income. On top of the post Hatfield National Recovery Programme there was TWS at £500million and probably rising, the WCR at £6.3bn and certainly rising plus the sting in the tail of the Periodic Review. Railtrack had signed up to a new performance regime that boosted the penalties of delays and reduced the compensation.
Sure enough, when the results for 2000-2001 were announced in July, there was a £534millioon loss. But new Chairman john Robinson held the dividend to retain city confidence. The company revealed a £3.8billion shortfall in income during the next five years but was relying on efficiency gains and another £2billion from the Regulator to cover all but £1billion.
We and many others concluded that Railtrack was getting the bad news out of the way. But that month Robinson decided to make a clean breast to Government and throw Railtrack on its mercy. Things were so bad, said Railtrack, that the Government had three options - renatonalisation,, insolvency or release from the Regulatory regime and a lot more government cash over the next four years.
Railtrack now says that the first two options were proposed only so that the could be discarded. Naive to the last Railtrack had handed the executioner the sword he was looking for.
All that was needed was for the Strategic Rail Authority (AKA the Treasury) to declare that its best endeavours to bring forward £450m in grants by October had not been not good enough and Railtrack faced insolvency. With the independent regulator threatened with extinction Railtrack went quietly to the knacker's yard.
Byers strike was indeed a bold and cunning plan. Unfortunately Raltrack's timing of its crisis meant that what came next had not been thought through. In Whitehall special advisors were still consulting on restructuring of the industry. Thus as Modern Railways went to press Byers was still wedded to a not for profit son of Railtrack Trust bringing sweetness and light to the fragmented contractual railway created by the Conservatives.
For some reason, Byers thinks that creating a trust would bring an end to the ‘self-defeating system of penalties and compensation'. But NuTrak would still be at the centre of the performance regime, unless in the new railway everyone is supportive and positive in times of trouble. ‘Did your 5000tonne freight train across Reading Junction in the evening rush? My dear chap, it could happen to anyone, no of course I wouldn't dream of accepting compensation, I'm sure the SRA will understand and not penalise us for delaying our passenger, who we will, of course give a total refund'.
In fact, son of Railtrack would leave the industry with all the ills which got it into the present mess plus an enfeebled centre. And meanwhile our battered industry faces a continuing investment hiatus, and not just because the Adminstrators are unlikely to sign contracts for new signalling schemes. The city sees that if Byers could pull the rug from under Railtrack it could do it to any private investor in an industry fuelled on public money.
What is the way forward? We stick to the manifesto on the September (?) issue. Let NuTrak act as a landlord and lease the asset to railway companies who will run the railway and maintain the infrastructure. It will demand more upheaval than maintain a not for profit status quo, but without radical restrucring it is hard to see how the railway can recover