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Railtrack splits three ways to avoid collapse

CRISIS-HIT RAILTRACK has split into three in an attempt to stem the losses which have seen the company plunge into a finacial disaster.

The three new divisions are Core Network Operations, Enhancements & Major Programmes and Property & New Businesses.

The Property & New Business wing hopes to bring in more than £1bn over the next five years and exploit telecoms and internet opportunities.

Technical director Richard Middleton will act as number two in the Core Network Operations wing, aligning engineering on renewals and maintenance with train running.

Fellow engineer and major projects director Simon Murray will sit on the board of the Enhancements & Major Programmes wing, set up to assess risk and the degree of Railtrack involvement in new projects.

The move marks Railtrack's decision to stand back from major rail projects in the light of its parlous financial state.

Spiralling costs on projects to which Railtrack is already committed - now termed legacy projects - such as the £6.3bn West Coast Main Line originally budgeted at £2.2bn, are blamed on inadequate 'project evaluation and scope definition.' Overruns on the £800M Thameslink to around £1bn have prompted a review of Railtrack's involvement.

Losses stemming from the Hatfield crash of £733M took the company into the red for the first time, posting a loss of £534M for the year to March. Railtrack faces an investment shortfall of £3.8bn over the next five years, not including risks from ongoing projects, claims from train operators and prosecutions which it states 'could seriously prejudice the group's financial position'.

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