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Railtrack fines to fund track upgrades


INVESTMENT IN the rail network looks set to be boosted further under new legislation introduced to Parliament this week.

The Railways Bill will legally establish the Strategic Rail Authority and give it the vital 'carrots and sticks' to encourage Railtrack to spend more on the network.

Under the new law, the SRA will have powers to order Railtrack to upgrade parts of its network which it feels are not performing adequately. It will also be able to bring forward schemes currently on the back burner.

New Rail Regulator Tom Winsor will be given tougher powers to impose 'unlimited fines' on Railtrack if it breaches its licence commitments.

However, any improvements ordered by the SRA will be subject to Railtrack being 'adequately rewarded' for the work. If Winsor considers schemes such as rural rail lines and freight routes to be in the public interest but uneconomic, they could be funded directly by the SRA through grants, loans or guarantees.

It is also the first time that the Regulator will be able to take retrospective action over failures to meet investment promises. In contrast to the Railways Act 1993, Railtrack could still face hefty fines if a contravention has been put right by the time enforcement action is taken.

SRA chairman Sir Alastair Morton has already expressed concern about Railtrack's level of spending. Speaking at the launch of the Bill he said: 'It isn't going to be good enough to invest just so much that it only deals with today's requirements. We have to take the network forward.'

Winsor said any fines imposed on Railtrack would be 'technically unlimited' but would be linked to turnover and have to 'fit the crime'. Cash raised through fines would be retained by the SRA for investment back into the railways rather than passed on to the Treasury. He added that he was considering action against Railtrack over its failure to meet punctuality targets and its slow start in upgrading the West Coast Main Line (NCE last week).

Deputy Prime Minister John Prescott said financial penalties could also be applied to Railtrack if it failed to meet its commitments on the Channel Tunnel Rail Link.

The Bill was given a cautious welcome by the Institution of Civil Engineers and rail campaigners. Chairman of the ICE transport board David Bayliss said: 'This legislation is encouraging but we should be looking for the SRA to draw up a clear strategy for how these grants, loans and guarantees could be used.'

But director general of the Railway Forum David Morphet said there were questions still unanswered. 'The SRA has powers to raise money but whether the Treasury will allow it to do so is a different matter,' he said. 'The Bill is not an automatic way of securing investment.'

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