Railtrack bondholders are expected today to reject key parts of the Governments plans to replace the infrastructure group with a not-for-profit company.
Investors say they would not accept any debt exchange that caused them an economic loss. They say a credit rating of Triple B would mean a loss.
At the same time, senior advisers working on the Railtrack relaunch have warned that a report on the condition of the national rail network will not be complete for up to two years, posing a threat to the refinancing plan.
Michael Howard, shadow chancellor, called for transport secretary Stephen Byers to be investigated by the Financial Services Authority because he may have acted as a “shadow director” of Railtrack.
Railtrack directors look set to join the new rail network owner despite their part in the collapse of the privatised business.
Critics warned this would make it harder to win the confidence of private sector lenders and other rail companies although some said they would provide valuable expertise.
English, Welsh and Scottish Railway warned freight trains would be forced of the lines if the Government allowed passenger companies to dominate the not-for-profit company.
But one report claims the Government has pledged a further £500m of taxpayers money as compensation for a 50% reduction in rail freight charges the company could not afford to make.
The Government approved the reduction over the next five years to encourage freight traffic.
Financial Times 19/10/01 page 6
The Times 19/10/01 page 27, page 30, page 31 (Commentary), page 32
The Daily Telegraph 19/10/01 page 35
The Independent 19/10/01 page 22
The Guardian 19/10/01 page 27
