Railtrack posts big loss

May 24, 2001
Web posted at: 0942 GMT

LONDON (CNN) -- UK rail network operator Railtrack posted worse-than-expected losses of more than half-a-billion pounds because of major track renewal.

The company's results for the year ending March 31 show the aftermath of the fatal Hatfield train crash near London -- when cracked rails were discovered -- cost it £1.23 billion ($1.7 billion).

Railtrack said there had been exceptional charges of £644 million for costs due to renewing cracked rails and £586 million paid in penalties. This meant a pretax loss of £534 million for the year.

The company said it estimated it needed £700 million a year more than that currently allowed by the regulator to operate and maintain the network. It said an extensive examination after the Hatfield disaster had revealed it was in a poorer condition than previously thought.

Railtrack also admitted that underlying train performance had deteriorated throughout the year, with the number of delay minutes attributed to Railtrack rising by 125 percent, compared to an industry rise of 69 percent.

"The last six months has been a humbling experience for everyone at Railtrack," said chief executive Steve Marshall, who was appointed last November in a management shake-up.

"The new management team knows that the only way to rebuild our reputation is through delivery not words. It will take money, time and much increased focus on the basics to get the network to an acceptable standard," he said in a statement.

Executive directors will forego their performance bonuses but a dividend of 26.9 per share will be paid for the year by the privatised operator.

Marshall later told a news conference that Railtrack hoped to raise between £3 billion and £4 billion from the capital markets over the next year or two.

Railtrack shares were down 5.2 percent at 451.75 in London on Thursday morning.

Railtrack
Passengers face more rail misery – Nov. 18, 2000
Four die in UK train crash – Oct. 17,  2000

Note: Pages will open in a new browser window

External sites are not endorsed by CNN Interactive.