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Shareholders clear Railtrack sale to Network Rail

NETWORK RAIL this week passed the final hurdle in its bid to take Railtrack out of administration, after shareholders backed the deal on Tuesday.

Support came after European Union statistics body Eurostat ruled last week that government guarantees on loans taken out by Network Rail to fund the takeover did not count as subsidy.

The government had feared that opponents would claim the guarantees were an unfair subsidy. Had they prevailed, this could have forced the government to count the cost as public spending.

Eurostat agreed with an earlier UK Office of National Statistics ruling that, as the guarantees were unlikely to be called in, they need not be accounted for on the government's books.

Network Rail has now successfully secured £9bn in finance to take over Railtrack and fund ongoing track maintenance and renewals. The government will back these loans via a £4bn contingency fund set up by the Strategic Rail Authority (NCE 4 July).

Shareholders also backed the proposed disposal of the rights to buy section one of the Channel Tunnel Rail Link to London & Continental Railways, the project's original owner.

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