NETWORK RAIL last week gave details of its proposal to take over the running of the UK's rail network, a deal it hopes will be completed by August.
The deal that would take Railtrack out of administration is now dependent on agreement from both Railtrack shareholders and the European Union.
An announcement had been expected weeks ago but legal wrangling delayed the deal until last week.
Network Rail is the government's preferred successor to Railtrack, which was taken into administration last October. It will reinvest any profits back into the rail system, unlike Railtrack who had to pay shareholders' dividends.
Network Rail will concentrate on maintenance and renewals work to improve the current network, leaving new projects to the special purpose vehicles which the Strategic Rail Authority (SRA) is setting up.
Bridge financing of £9bn was secured from a series of banks.
Five hundred thousand pounds will be used to acquire Railtrack and an estimated £7.1bn will be used to pay off the Railtrack debt.
The government will provide a 'last resort' back up contingency fund of £4bn via the SRA.
Network Rail also announced that agreement had been reached enabling London & Continental Railways (LCR) to acquire the rights to the Channel Tunnel Rail Link Section 1 from Railtrack Group. Network Rail will pay LCR £80M to operate and maintain the whole length of the line.
It will take 18 months to assess and plan a work strategy, Network Rail estimates. This includes completion of an asset register detailing the whole network that Railtrack has been working on for the past three years.
Shareholders in Railtrack Group will vote on the proposal next month. As public money is being used to finance the deal it also has to be agreed by the European Commission.
Addressing parliament last week after the announcement, transport secretary Alistair Darling committed to increase government spending on rail to £4.6bn a year over the period of the 10 year plan to 2011. In July 2000 this figure was just £2.9bn.