HC Deb 26 October 2001 vol 373 cc424-6W
Mr. Hancock

To ask the Secretary of State for Transport, Local Government and the Regions how much public money has been granted to Rai1track in total; and if he will make a statement. [7965]

Mr. Jamieson

In 1994—95 and 1995—96, when Railtrack was still in the public sector, grants of £32 million and £34 million were paid towards the cost of maintaining level crossings. Since its privatisation in 1996 the company has recovered those costs, and other costs, through access charges paid by passenger train operating companies (TOCs) and freight operating companies (FOCs). So, although no grant was paid direct to the company between 1996–97 and 2000–01, the company's profitability in those years was contingent on public money. Some 90 per cent. of its income is paid to it in access charges by TOCs and FOCs, most of which are supported by public money.

In addition, in accordance with the terms of Railtrack's 2 April agreement with Government, Railtrack received £337 million of network grant on 1 October 2001; and the company, or its successor body, will receive £162 million of network grant in 2001–02 in respect of the (October 2000) final conclusions of the Rail Regulator's periodic review of access charges.

Mr. Flight

To ask the Secretary of State for Transport, Local Government and the Regions if Railtrack will honour its outstanding debts to its creditors; and if he will make a statement. [8992]

Mr. Jamieson

The Government have committed themselves to provide the railway administrators with sufficient funds to allow them to continue to pay trade creditors as invoices fall due for payment. We have also committed ourselves to provide sufficient funds to pay non-default interest, lease rentals and scheduled repayments to finance creditors for an initial period of 45 days. This will continue for the finance creditors who have signed up to certain standstill arrangements until a transfer scheme is proposed.

We intend to enable a proposal to be made to the railway administrators which would, if accepted, result in the transfer of both the business of the company and the debt of the finance creditors participating in the standstill to a new company limited by guarantee. The new company would be financially sound and have a credit rating of at least BBB and potentially higher. Indebtedness would be transferred on broadly the same economic terms, applicable in the absence of default, as applied immediately before administration. Lenders should not lose any principal or interest.

Chris Grayling

To ask the Secretary of State for Transport, Local Government and the Regions if he has received an undertaking from the Treasury to guarantee finance required by the successor company to Railtrack to invest in the rail network. [8996]

Mr. Jamieson

My right hon. Friend the Secretary of State has not received, or asked for, such an undertaking.

Chris Grayling

To ask the Secretary of State for Transport, Local Government and the Regions if he will make a statement on the nature of the approaches made by West LB relating to Railtrack. [9002]

Mr. Jamieson

West LB has written to my Department setting out in broad terms its proposals for a scheme to take Railtrack plc out of administration. It will be for West LB to consider how to develop its proposals and whether or not to submit them to the railway administrator, who is responsible for making proposals on how to move the company out of administration.

Mr. Norman

To ask the Secretary of State for Transport, Local Government and the Regions when he first advised(a) Treasury officials and (b) officials in his Department that his preferred option was to put Railtrack into administration. [8696]

Mr. Jamieson

[holding answer 22 October 2001]: Having reviewed all the relevant papers and considered all the options, my right hon. Friend the Secretary of State for Transport, Local Government and the Regions decided not to accept Railtrack's proposal for additional funding on 5 October. Officials in my Department and in HM Treasury were subsequently informed of my right hon. Friend's decision and of his intention to petition for a Railway Administration Order.

Mr. Norman

To ask the Secretary of State for Transport, Local Government and the Regions on what date he first obtained legal advice regarding the possibility of putting Railtrack into administration. [8691]

Mr. Jamieson

[holding answer 22 October 2001]: Since the date on which Railtrack made its request for additional funding, my right hon. Friend has taken a wide range of advice, including legal advice, on all the options available to him and their possible consequences.

Mr. Hoban

To ask the Secretary of State for Transport, Local Government and the Regions what meetings his officials held with Ernst and Young to discuss whether Railtrack plc should be put into administration; and when these meetings were held. [10191]

Mr. Jamieson

[holding answer 25 October 2001]: My officials had regular meetings with representatives of Ernst and Young after an initial meeting on 23 August and their subsequent engagement as advisers.