UK: Far from showing signs of contrition over the storm and upheaval that his October 7 decision had generated, Secretary of State for Transport Stephen Byers told the House of Commons on October 15 that 'the administration of Railtrack provides us with a golden opportunity to create a railway system which is united and not fragmented', with 'a railway network provider that answers to the millions of passengers and not private shareholders.' Rounding on Railtrack, he claimed that the company was seeking 'effectively an open-ended funding request on the government', and stated that 'I could not give Railtrack a blank cheque'.
Byers was particularly unforthcoming on the details of what is to happen next. It had been widely expected that he would announce a restructuring of the Strategic Rail Authority, into which the Rail Regulator would have been merged, but this proposal ran into furious opposition from the Train Operating Companies. Nor did he give details of the infrastructure company to be formed out of the wreckage of Railtrack other than to say that 'we shall be proposing to the Administrator that a private company limited by guarantee be established', and that 'we intend to streamline the existing structure.' The new structure, he said, would provide 'strong strategic leadership, a cut in the burden of day-to-day interference, an end to the self-defeating system of penalties and compensation, clearer accountability, and an end to perverse incentives.'
Reaffirming that 'the government is committing some £30bn to the network over the next 10 years', he was confident that the new company 'would be able to raise funds in the market. Private sector funding would operate in partnership with government to deliver the 10-year Plan objectives for rail.'
Giving evidence to the Transport Select Committee of the House of Commons two days later, SRA Chairman Sir Alastair Morton described the SRA as having 'powerless status' and went on to warn that the government's confidence in the private sector committing another £34bn to rail investment projects was misplaced. Railtrack's collapse would add greater risk to private investment, and in particular 'the government, the Treasury and the the Department of Transport working together have done a lot to put doubts in every investor's mind.' Sir Alastair is to resign on December 14.
