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16/10/2001
Byers claims placing Railtrack in administration was only option
The war of words between Railtrack and the UK government reached a new crescendo as Transport Secretary Stephen Byers claimed that Railtrack had left the government with no option but to place the company into administration.
While Mr Byers told the House of Commons on Monday that Railtrack had first raised the issue of insolvency, Railtrack hit back at Mr Byers speech saying it “lacked substance in many crucial respects”.
Railtrack denied asking the government for assistance to get the troubled rail network operator back on course, claiming that Railtrack management had been seeking to implement a wide-ranging package of reforms since July.
But Railtrack said that while administration had been an option, it had not sought to put this forward as a preferred way forward for the company.
Mr Byers said that the company had informed his department in July of the impending financial disaster, which by early 2002 would have seen losses reaching almost £2 billion.
The options available were stark – restructuring, renationalisation or receivership. While Railtrack claims that it favoured restructuring, Mr Byers said he could not give Railtrack a “blank cheque” and that receivership was the only alternative in light of the company’s mounting losses.
Shareholders in Railtrack are understood to be considering legal action in a bid to recoup some of their investment in the company. (SP)
While Mr Byers told the House of Commons on Monday that Railtrack had first raised the issue of insolvency, Railtrack hit back at Mr Byers speech saying it “lacked substance in many crucial respects”.
Railtrack denied asking the government for assistance to get the troubled rail network operator back on course, claiming that Railtrack management had been seeking to implement a wide-ranging package of reforms since July.
But Railtrack said that while administration had been an option, it had not sought to put this forward as a preferred way forward for the company.
Mr Byers said that the company had informed his department in July of the impending financial disaster, which by early 2002 would have seen losses reaching almost £2 billion.
The options available were stark – restructuring, renationalisation or receivership. While Railtrack claims that it favoured restructuring, Mr Byers said he could not give Railtrack a “blank cheque” and that receivership was the only alternative in light of the company’s mounting losses.
Shareholders in Railtrack are understood to be considering legal action in a bid to recoup some of their investment in the company. (SP)
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