Network Rail must justify it increased spending plans

Tom Winsor said Network Rail had to "rise to the challenge" of providing a more efficient rail infrastructure.

But he expressed concerns about the company's ability to turn things round.

Last week Network Rail unveiled heavy losses and mounting debt, but insisted that more money was being invested in upgrading track.

As it published its financial results for 2003-04, the company said its performance regarding train delays was "unacceptable".

Network Rail has not made the case for all the activity it is projecting Tom Winsor, Rail regulator

On Tuesday, Mr Winsor said it was "very difficult to incentivise" Network Rail, as its elected members were unable to exert as much control over spending as shareholders in Railtrack had been.

Fines he had imposed on Railtrack had been effective because they had hit shareholders, whereas the new company had no shareholders, he said.

"With Network Rail, a key area of accountability, the shareholders, has gone and it's harder to regulate the company," Mr Winsor said.

Forecast concerns

The rail regulator also repeated his concerns about Network Rail's plans to spend �27.8 billion over the next three years, almost �12bn more than what the company had budgeted for.

"Network Rail has not made the case for all the activity it is projecting, it will have to justify this increase in activity," he said.

"We are very concerned with the forecasts that Network Rail is making in relation to activity and costs, and these will have to be thoroughly justified."

Mr Winsor will decide in December how much Network Rail can charge train companies for using the tracks it maintains.

His comments came as he published the Office of the Rail Regulator's business plan for 2003-04.

"Network Rail must deliver on its committed projects and work with its customers right down to the local level to provide the railway infrastructure that meets their needs," he said.

"Railtrack failed to do this. Network Rail must rise to meet this challenge and conduct its business in a mature and appropriate manner to deliver sustained improvement over time"