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Treasury battles to make up rail funding shortfall

TREASURY OFFICIALS were this week working on a plan to increase government borrowing in an attempt to stave off higher track access charges and keep a lid on fare increases.

The move would allow Rail Regulator Tom Winsor to put off a planned increase in access charges for two years.

Last month Winsor set Network Rail's budget for the next five years at £22.2bn, £7.4bn more than the Treasury had initially expected.

The Treasury, the Strategic Rail Authority (SRA) and the Department for Transport (DfT) are now working to close this gap.

They want to keep access charges down and make up revenue shortfalls with higher government borrowing, Winsor told NCE on Tuesday.

He added that 10 days before he set Network Rail's budget, the DfT and SRA approached him with a last minute plan to change the balance between government borrowing and access charges.

According to Winsor's Access Charges Review 2003 Final Conclusions document published last month, the SRA and DfT said that it would be 'desirable for the SRA to increase the amount of money it pays in grant to Network Rail, allowing access charges to be set at a lower level'.

Winsor warned that he would raise track access charges anyway if the SRA attached conditions to his accepting the new funding regime.

The SRA has until the end of February to work out details of the plan (News last week).

lThe Department for Transport named London Underground PPP arbiter Chris Bolt as successor to Winsor when he steps down in July. Bolt was shadow Rail Regulator in 1999 before the SRA came into being. He will spend three days a week working as chairman-designate of the new office of rail regulation from July. He will continue his role as PPP arbiter.


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