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Byers looks ready to consider private offers for Railtrack

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TRANSPORT SECRETARY Stephen Byers this week appeared to back away from his plan to allow a not for profit company to take over Railtrack.

Instead he was understood to be seriously considering offers from private bidders.

At least two parties have now held negotiations with the government and Railtrack's administrator Ernst & Young. They have both received 'supportive signals', a city insider confirmed.

Ernst & Young has to put forward viable proposals to the government for final approval before a rescue package for the track operator can be agreed.

Before Railtrack's collapse the operator had received informal approaches from potential takeover candidates.

But the two 'financial black holes' of the West Coast Main Line and the post Hatfield repair programme deterred investors.

Now, potential investors are expected to demand government guarantees of funding for the two projects before committing.

But one Railtrack insider played down Byers' apparent change of heart. He said the shift in favour of a private sector takeover was 'merely a smoke screen to try and show a level playing field' for potential bidders, and that Byers' not for profit idea would still prevail.

Ernst & Young now expects to exceed the original six month timetable to find a buyer for Railtrack. The biggest hold up is expected to be disentangling the operations and duties of Railtrack Group, which owns stations and property, from track owner Railtrack plc.

In a separate development it has emerged that the government was planning to prevent the rail regulator from intervening in efforts to save Railtrack from administration. A leaked letter sent by government financial advisor Schroder Salomon Smith Barney to Byers the day Railtrack went into administration shows that Byers had planned to introduce emergency legislation which would allow him to overrule the regulator if he intervened.

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