Grand plan for railways stalled by soaring costs

Strategic Rail Authority says £30bn for improvements is almost gone eight years early

The Government's grand plan for rail was in tatters yesterday because virtually all of a £30bn tranche of taxpayers' money has been used up eight years early.

The cash should have lasted until 2010 but was "evaporating by the minute" and all new developments would have to be scrapped, the Strategic Rail Authority (SRA) said.

Richard Bowker, the chairman of the authority, said that even existing schemes would have to be deferred or curtailed.

The tough new regime will apply to all improvements to the network, not just the main initiatives. Rail services might also be cut back. Mr Bowker warned that there were "more trains on the network than it can reliably support".

Among the casualties are likely to be the electrification of the system and the lengthening of platforms to relieve congestion in south London. The plan to upgrade the Thameslink north-south London line is also likely to be scaled back. Other plans such as extra capacity in the West Midlands and Greater Manchester areas and the new Crossrail east-west London link could be affected. Mr Bowker's blueprint for a dedicated north-south line to rival French TGV services, initially between London and Manchester, is likely to remain on the drawing board for some time.

One irate SRA official criticised the companies running the network, saying: "They really should step out of their nappies and clean themselves up. We simply cannot have projects suddenly jumping in price from £20m to £60m."

The Conservatives said the 10-year transport plan was "in crisis" while the Liberal Democrats said it was vital that the SRA and Network Rail – Railtrack's replacement – tackled rising costs.

Mr Bowker told a meeting of the Rail Passengers' Council: "Costs are rising steeply, both on projects and on operations, and this is squeezing out funding for investment. We still have a commitment for £33.5bn of public funding secured for implementation of the first strategic plan a year ago, but it now buys less than it did then.

"So, there is less to invest in the improvements that we would all like to see, and there will be no new spending commitments in the next strategic plan to be published in January 2003. There is a view that Government will write the cheque for rail, whatever the size of the bill. I do not share that view. We have to prove that we can manage costs effectively and that we are providing value for money."

Mr Bowker said "radical action" had to be taken to improve performance, which had "languished for too long". He would not be approving any further increases in service frequencies without evidence that they were affordable and could operate reliably.

Alistair Darling, the Transport Secretary, told the conference in London that the industry needed to get a grip on costs. "Everyone in the industry must get a lot tougher about it. There are substantial amounts available to invest, but we'll spend it prudently."

Tim Collins, the shadow Transport Secretary, said: "It has been clear for some time that the Government's 10-year transport plan is in crisis. Sadly, it seems that many of those involved are attempting to distance themselves from this shambles. What the people of Britain deserve is an urgent statement from Alistair Darling spelling out the status of this seemingly disastrous plan".

* The combined speed of the GNER express and freight trains in the Selby rail disaster, 142mph, was a record for such an incident, an inquiry reportsaid yesterday. The collision was "outside the parameters of all recognised crashworthiness standards", the Health and Safety Executive said. Ten people died in North Yorkshire in February 2001, when a Land Rover careered off the M62 on to the east coast main line.