§ Lord Barnettasked Her Majesty's Government:
To which "certain assets" and which "certain people" the Lord Falconer of Thoroton was referring in his answer to a question on the Railtrack Statement on 15 October at Col. 394 of the Official Report as to how the new company will be able to raise capital. [HL814]
§ Baroness Blatchasked Her Majesty's Government:
Further to the statement by the Lord Falconer of Thoroton on 15 October at Col. 394 of the Official Report that "the new Company will be able to raise capital on the basis that it will be a company limited by guarantee, with certain assets guaranteed by certain people"—
- (a) who will provide the guarantee;
- (b) what are the assets; and
- (c) who are the certain people. [HL852]
§ The Minister of State, Department for Transport, Local Government and the Regions (Lord Falconer of Thoroton)The Government intend to propose that a private sector company limited by guarantee should succeed Railtrack. The new company would be financially sound and structured so that it would achieve at least a BBB—and potentially higher—investment grade credit rating as the basis to raise debt finance.
146WAThe new company would be entitled to receive its revenue from track access payments from train operators, property income and the network grants from the SRA agreed as part of the Rail Regulator's October 2000 periodic review and the 2 April agreement between Railtrack and government. We are confident that these income sources, combined with an investment grade credit rating of at least BBB—and potentially higher—would enable the new company to raise the necessary level of finance at reasonable cost.
The new company would operate with much lower risks than Railtrack, concentrating on the exisiting network. The company would also be provided with an adequate level of reserves to act as a buffer for performance risks. It is anticipated that these reserves would accumulate over time as the company makes surpluses, but that the company could also have access to a standby loan facility from the Government. This would be a contingent facility, use of 'which would be enshrined in a contract to provide support in specified circumstances and for a capped amount. It would not amount to a Government guarantee.