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Industry slates Byers' Railtrack rescue plan as unwieldy

RAIL IN CRISIS

TRANSPORT SECRETARY Stephen Byers' plan to appoint between 12 and 15 people to run Railtrack's not for profit successor company would cause paralysis in the new track operator, industry insiders said on Tuesday.

One critic said that such a large group would find it hard to agree on policy issues, leading to compromise and reduced efficiency.

Byers told parliament on Tuesday that the proposed private sector company would take on Railtrack's £3.5bn debts and would be funded by government backed subordinate loans.

Repaying these loans would be lower priority than repaying conventional bank debt.

It is thought subordinate loans will allow the government to provide a financial cushion for the new company without having to take ultimate responsibility for its debts. As NCE went to press the size of the loan and its repayment terms were unclear.

In his statement Byers confirmed that the new company will only undertake small scale renewals, allowing so called special purpose organisations to carry out larger scale and higher risk upgrades.

The 12 to 15 member board, he anticipated, would include one member nominated by the Strategic Rail Authority and representatives of passenger groups and freight operators.

Byers also confirmed that a decision on other proposals for Railtrack, like the expected takeover bid from German bank West LB, would also be looked at before the government decided who could buy the company.

He gave no indication about the future regulatory regime for the railways other than to confirm it would be 'streamlined'.

He said there would still be an independent economic regulator.

INFOPLUS Go to www. nceplus. co. uk

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