Rail Regulator publishes objectives for Railtrack

16 January 1997
ORR/97/02

Following his pre-Christmas public comments about Railtrack's spending plans and actions, the Rail Regulator, John Swift QC, today addressed the full Board of Directors of Railtrack. He called for Railtrack to deliver an effective rail infrastructure renewal and investment programme in line with public interest objectives and with the basis on which Railtrack's access charges received regulatory approval.

The Regulator has set out these objectives in a policy Bulletin published today entitled "Regulatory Objectives forRailtrack".

In the Bulletin the Regulator recognises that there has beensome good news:

"I have said, publicly, that the improved performance of the passenger railway in 1996 is attributable, in part, to Railtrack. Passenger complaints are falling.

"Nevertheless, in certain important areas, progress has not been, in my view, satisfactory.

"To date, Railtrack's record, in terms of its stewardship responsibilities, is disappointing in important aspects. It has taken speedy action to improve current operational performance, which is clearly very welcome to rail users, but this has not been matched by equally prompt action to renew the infrastructure in modern equivalent form, for which Railtrack is also being paid."

The Regulator goes on to say that Railtrack must demonstrate that it has credible plans to deal with its backlog of expenditure, and must deliver on those plans, now that it is freefrom public sector financing limits. In repeating his pre-Christmas warning, he states:

"As I said in December 1996, the current level of underspend is wholly unacceptable. Thus, I expect Railtrack to deliver an effective infrastructure renewal and investment programme which follows four key regulatory principles:

Railtrack should, in a timely fashion, renew the railway infrastructure in the appropriate modern equivalent form;

Railtrack should take a proactive and positive approach to the development of the railway network in a way which reflects the needs of its customers and rail users;

Railtrack should make good the current shortfall in expenditure in an efficient and effective way; and

Railtrack's plans and investment approval processes should ensure delivery of these objectives."

Next month Railtrack will publish its annual Network Management Statement, required by its Network Licence. John Swift has impressed on Railtrack's Board that he will regard this as a key test.

"When Railtrack publishes its Network Management Statement next month, I expect it to demonstrate - publicly - its commitment and capability to deliver an infrastructure investment programme which meets the objectives I have set out above."

The Statement of Objectives also sets out the Regulator's wider objectives for Railtrack, covering:

promoting services to passengers;

ensuring efficient train timetabling and operation;

delivering better performance;

promoting rail freight;

improving railway group standards change procedures; and

encouraging flexibility in charging and preparing the way for the next periodic review of Railtrack's charges.

The Regulator concludes that the approach outlined in hisStatement for the Railtrack Prospectus, as reflected in the Bulletin, "will continue to be the basis underlying my objectives and expectations of Railtrack, and I expect to take further appropriate and timely regulatory action if Railtrack cannot demonstrate that these expectations are being met".

Regulatory Objectives for Railtrack is available from Sue MacSwan by contacting the ORR Library.

Rail Regulator publishes objectives for Railtrack

Glossary