Byers and Morton square up as CBI attacks 10-year plan for transport

A war of words erupted between the Government and rail chiefs yesterday as the CBI cast doubt on ministers' ability to deliver their 10-year £180bn transport plan. Sir Alastair Morton, chairman of the Strategic Rail Authority (SRA), warned that it might take 15 years before Britain enjoyed a modern rail network unless the government poured in billions of pounds of extra subsidy.

Stephen Byers, the Secretary of State for Transport, in effect, rubbished Sir Alastair's stewardship at the SRA, demanding radical changes in the way the authority handled the franchise process for train operators. The CBI waded into the conflict, declaring that the SRA under Sir Alastair lacked focus and leadership, and that the Rail Regulator, Tom Winsor, was "far too confrontational" in his approach to the infrastructure company, Railtrack.

In his first assessment of the government's ten-year transport strategy, Digby Jones, director-general of the CBI, attacked ministers for failing to take unpopular decisions in order to improve the "appalling state" of Britain's transport infrastructure. He warned that ministers needed to win the confidence of investors to attract the £56bn of private funding, which the Government sought.

"Nobody expected immediate improvements but the Government has a huge amount still to do. It must be prepared to take the tough decisions ahead. The success or failure of the transport plan will depend on clear, decisive leadership and putting words into action without further delay," Mr Jones said.

The CBI leader welcomed signs that the Government was attempting to streamline planning processes so that projects such as the Channel Tunnel Rail Link and Heathrow Airport's projected Terminal 5 could be expedited. He congratulated the Highways Agency for outlining in detail how it would play its part in the 10-year plan but criticised the Government for avoiding a "difficult decision" when it vetoed the plan for a bypass at Hastings.

He said London was "very close" to the stage where it was deterring investment because of a lack of action taken over transport in general and the Tube network in particular. The comments came as speculation intensified that Bob Kiley, the newly appointed chairman of London Transport, will be ousted this week because of his opposition to the government's public-private partnership for London Underground.

However, Mr Digby reserved his strongest criticism for the lack of progress in the rail industry. He pointed out that the strategic document being prepared by the SRA was 18 months overdue, and attacked the authority's "painfully slow" progress in dealing with the re-franchising process.

Mr Byers attempted to deal with that by issuing the authority with fresh orders aimed at securing immediate improvements to train services. He called on the SRA to deliver a better rail system by bargaining with current franchise holders rather than seeking to negotiate new licences which took far too long to deliver.

Sir Alistair hit back at Mr Byers last night, in effect accusing the secretary of state of moving the goalposts. The SRA pointed out that the replacement of the present short-term franchises with longer term licences was a stated priority of the 10- year plan.