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SRA plans undermine £60bn rail network upgrade, say lawyers


PLANS TO privately finance the planned £60bn upgrade to the rail network over the next 10 years will be undermined by project structures proposed by the Strategic Rail Authority (SRA), a leading City law firm warned this week.

A paper produced by lawyers at Theodore Goddard said the SRA's plans relied too heavily on Railtrack's ability to pay for privately financed projects on completion under design build finance and transfer (DBFT) arrangements.

DBFT proposals were first set out in the SRA's Strategic Agenda, published last March (NCE 22 March).

Instead, the Theodore Goddard report suggests Railtrack be allowed to lease projects from private consortia on a long term basis to allow the track operator to spread payments instead of having to find large lump sums to pay off consortia.

Under the proposal, private consortia would be given responsibility for maintaining new sections of track.

This project structure could bring in more investors, as track maintenance contractors and construction contractors could be brought in as project investors, to pump prime cash from the SRA. The Theodore Goddard paper says this structure could even allow Railtrack to fund projects without borrowing money if project consortia are headed by train operators.

In this case, Railtrack could pay for the project by reducing access charges levied on train operators.

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