Railtrack is still quibbling over paying safety bill

OVER THE past 12 months Railtrack has arguably become Britain's most unpopular business organisation. Under fire from the Rail Regulator over broken rails, train delays and a profound ignorance of the state of the assets it took over at privatisation, Railtrack has been at the centre of rows about safety since the Paddington disaster, which claimed 31 lives.

It is now routinely used as the seminal example of a company that has failed to reconcile private profit and public service. More specifically, it was held to have failed in its responsibility for safety in the industry, and the Transport minister, Lord Macdonald, said he was "minded" to strip the company of its control of the issue.

Gerald Corbett, the chief executive, and other directors can now expect to come under intense pressure to resign as the business grapples with yet another massive blow.

Yesterday's news makes it highly unlikely that the Government will press ahead with its plan to introduce the profit motive into air-traffic control. The Transport Bill, to be published today, is expected to contain "enabling" legislation for the introduction of private interest into the National Air Traffic Service, but it is likely to leave open the option of a non- profit-making group taking over the 49 per cent of equity on offer. Unions famously warned the Government that it was in danger of creating a "Railtrack of the skies".

Railtrack's inability to see past its commercial interests was illustrated yesterday at the rail safety summit, where Rod Muttrum, its safety director, made clear that no one had yet decided who should pay for new train safety systems in response to Paddington. Railtrack will introduce the train protection warning system (TPWS) to 12,000 sites by the year 2002, a year earlier than planned. The device can be overridden by drivers passing cautionary yellow lights, but stops the train automatically at red signals.

In fact, Mr Corbett indicated that the pounds 200m cost could be passed on to passengers. Although he said his company would provide pounds 200m in the short term, he left open the option of passing the burden on to train operators, which could raise fares to compensate.

The Deputy Prime Minister, John Prescott, said the new safety measures would be delivered, but he acknowledged that the arguments over who pays "will go on".

The company yesterday compounded its poor public image when it appealed against an order to shut down SN109 - the signal passed at danger by a Thames Trains service as it sped towards the Great Western express outside Paddington.

Railtrack continues to make high returns; it recorded half-year pre-tax profits of pounds 236m, 5 per cent up on last year, and is making pounds 1.3m a day. However, it needs good profits so that it can borrow money to invest in the future of the industry.