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Winsor weighs rail upgrade options

News: Rail Regulator Tom Winsor's job has just expanded because of train operators' plans to finance and upgrade parts of the rail network. He discusses the implications with Richard Thompson.

UNTIL LAST month, Rail Regulator Tom Winsor's job was straightforward. He had to regulate the relationship between Railtrack and the train operating companies to ensure passengers got the best deal.

Since then, several groups of train operators and contractors have submitted plans to take over and finance upgrades of parts of the rail network in return for longer train operating franchises.

The prospect of new infrastructure owners, particularly train operators, opens up a huge can of worms for the Dundee born lawyer.

In January, shadow Strategic Rail Authority chairman Sir Alastair Morton claimed there was too much work on Britain's rail network for Railtrack to manage alone. He urged the network manager to move over and let train operators, contractors and bankers invest in the nation's railways (NCE 27 January).

But Railtrack insisted that it should have sole responsibility for Britain's rail infrastructure. It claimed that allowing other infrastructure owners to run parts of its core, multi-user network would create massive operational and safety problems. Any new owners should be limited to single user spurs, sidings and stations (NCE 9 March), it added.

Winsor is open minded about new infrastructure operators. He says they are one possible solution to the problem of how to upgrade the rail network quickly. And he thinks they may be unavoidable if Britain is to get the rail network it demands.

'I understand Railtrack's concerns about Special Purpose Vehicles (joint venture investment companies),' he says. 'But I think it needs to be more imaginative and open minded about these things. The idea of innovative financing schemes is well worth considering.'

Winsor adds that SPV investment would allow the railways to benefit from borrowings that do not put pressure on Railtrack's balance sheet.

He also suggests they could bring in extra project management resources of which Railtrack does not have enough.

'If the money and technical capability are available, then clearly a backlog of work shouldn't be allowed to build up just because there is only one company involved,' he says. 'The SPVs may also become a useful comparator for Railtrack's cost.

'Clearly, the network must be operated as an integrated single network,' he says. 'I don't think anybody is seriously saying the network should be operated by different people on a patchwork basis. Therefore safety, maintenance, day to day running, signalling decisions, how to deal with operational disruption, will all be in Railtrack's hands. But Railtrack must not spoil its case by overstating it.'

Though he believes operation of the network should remain with Railtrack, he accepts ownership of pieces of the network and allocation of capacity need not. But he adds: 'It makes a lot of sense that it should be Railtrack once the thing is built.'

'If TOCs owned the infrastructure over which they operated, then clearly there are issues about the allocation of capacity. But I think it is very unlikely that the same company that owns the infrastructure would be the train operator. It is more likely the SPV would be a separate company to the TOC.'

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