HC Deb 09 March 1994 vol 239 cc269-71W
Mr. Spellar

To ask the Secretary of State for Transport (1) how many bids were received for the contract for legal work for Railtrack;

(2) whether British Rail was invited to bid for the legal work for Railtrack;

(3) what estimate he has as to the number of staff who will be made redundant as a result of the decision of Railtrack to outsource its legal work.

Mr. Freeman

While Railtrack remains a division of British Rail, these are matters for the British Railways Board.

Mr. Wilson

To ask the Secretary of State for Transport if, in the illustrative chart, "Financial Flows in the New Railway Industry", published by his Department, there is any statutory connection between the flow from Railtrack entering the box marked, "Public Expenditure Provision for Railways", and the flow which links that box with "Franchising Director".

Mr. Freeman

There is no statutory connection. The external finance limits for BR and for Railtrack and the resources available for passenger rail subsidy in 1994–95 will be published on 10 March. The prospective cash surplus of Railtrack is being taken into account in setting the franchising director's vote. The Government have said that the franchising director will have sufficient resources to meet the costs of existing passenger services.

Mr. Dobson

To ask the Secretary of State for Transport if he will publish the formula for the charges to be levied by Railtrack for access to the rail network.

Mr. Freeman

I refer the hon. Member to the reply given by my right hon. Friend the Secretary of State for Transport on 15 February,Official Report, column 716, which set out the basis on which Railtrack has calculated its charges.

Franchised and BR passenger operators will pay the direct costs that their services impose on Railtrack. Common costs will be specific sections of track, and those which can only be identified to a geographic area, will be recovered from operators in proportion to the number of passenger-vehicle miles they run in each area. Network costs—the core overheads of providing the network which cannot be broken down more specifically—will be recovered in proportion to operators' revenue from fares.

Charges to freight operators and non-franchised passenger operators will be subject to commercial negotiation, but must at least cover direct costs.

The application of these methods is a matter for Railtrack. The rail regulator will consider and approve all access agreements entered into after 1 April 1994.

Mr. Wilson

To ask the Secretary of State for Transport if he will state on the basis of valuation of assets, in cash terms at current prices, the minimum rate of return sought by the Treasury from Railtrack in each of the next five years.

Mr. Freeman

Railtrack will be set a target rate of return on capital of 8 per cent, to be achieved over its first four years of business. Discussions are continuing with Railtrack on the setting of initial financial targets, including the opening required rate of return on capital.

Mr. Wilson

To ask the Secretary of State for Transport if he will describe the basis on which the assets passing to Railtrack have been valued.

Mr. Freeman

In common with other public sector undertakings, Railtrack's assets will be valued on a modern equivalent asset value basis. The valuation will reflect the existing condition of assets and the cost of continuing to provide capacity broadly equivalent to that provided now.