Railtrack job 'costing £3m a month'

The bill for the 50-plus staff of administrators sent in to take over Railtrack and sort out the successor body is costing taxpayers more than £3 million a month, it was revealed today.

MPs have been told that the administrators, appointed by the High Court, could be there for six months or more while a new body is found to replace Railtrack - but other industry estimates say it could take twice or even three times as long.

Alan Bloom, of chartered accountants Ernst & Young, Railtrack administrators, told members of the Parliamentary Transport Committee investigating the future of rail franchising that his own charges are £450 an hour. Other administration staff are on an average of £250 an hour.

The bill for those 50 workers comes to £2.8 million a month. Add Mr Bloom's charges - £100,800 a month - and the total monthly bill comes to a fraction under £3 million.

Mr Bloom told the committee that the six-month target to find a successor body for Railtrack was "a very tight timetable".

Pressure on Transport Secretary Stephen Byers to sort out the future of the railways increased, with fears that any delay in setting up the new body to take over Railtrack's role could have dire consequences both for the travelling public and the entire railway industry.

Railtrack chief executive Steve Marshall, who has announced his resignation in protest over the Government forcing his company into administration, told the committee: "If the period of uncertainty is not brought to an end very quickly our ability to retain the staff we need is going to be seriously impaired."

Mr Marshall repeated to MPs his earlier criticism of the Government's handling of the Railtrack crisis which led to the company being put in to administration at the beginning of October.

He again insisted that Railtrack was not insolvent at the time that the Government had "reneged" on a £450 million transaction due to Railtrack on 1 October.

He was extremely sceptical about hopes of attracting the necessary £34 billion from the private sector needed to fund the Government's 10-year plan for the railways.

"Levering in such a sum is simply not credible if the Government is prepared to deal with investors in this way," Mr Marshall told MPs. Mr Byers had earlier told the Commons that his principal concern was to ensure that operation of the rail network would, after the proposed transfer, be undertaken efficiently, safely and economically.

Mr Byers said in a written reply to Labour MP Vernon Coaker: "It is important that we use this opportunity to remodel the industry and ensure that the problems that bedevilled Railtrack's stewardship of the network are not simply transferred to its successor."

In the Lords, former British Rail chairman Lord Marsh appealed to the Government to act now to sort out the crisis in the railway network. Crossbencher Lord Marsh, former Labour transport minister, opened a debate on the long-term problems in the industry. He said ministers now had the time and opportunity to make improvements.

He said: "I think this government is in a unique position. It has the majority, the time. It has the opportunity to do something and to achieve something which will be very popular with the electorate.

"And, may heaven protect them, it may even persuade the electorate to forgive them for the very wicked things they have done in the last few years."