The bidders now queuing for Railtrack

GERMAN bank WestLB and the US finance house Babcock & Brown will face competition to buy Railtrack, claim administrators Ernst & Young. The accountants are soliciting bids for the collapsed network operator and hope to put together an estimate of the state of the business, including its assets and liabilities, for interested bidders within a few weeks.

'As the process becomes a lot clearer, I think we will begin to see a little more interest,' said Mike Rollings, one of the administrators.

He did little to dispel fears that the Government faces a large conflict of interest in its dual role as a judge of rival bids and in seeking to buy the assets itself.

Two of the critical elements in the value of the business are how much cash the Government is prepared to pump into the network and the regulatory framework. Both could be changed without much notice.

'We are trying to establish a level playing field,' said Rollings. He said the administrators could not extract any hard commitments on funding or regulation from the Government. He also quashed hopes that the assets would not be auctioned.

WestLB and its principal finance boss, Robin Saunders, want a 'collaborative effort' with the Government - not an auction. City and private shareholders are meeting Transport Secretary Stephen Byers today. City funds will take legal action if Byers does not show a willingness to negotiate compensation.

Rail regulator Tom Winsor has modified Railtrack's network licence to prevent the sale of land critical to the development of the rail network. The modification was proposed in August, two months before the Government called in the administrators.