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Originally posted by The Mad Monk
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There's a decent summary on the Wiki article-
The fatal accidents at Southall in 1997[4] and Ladbroke Grove in 1999[5] called into question the effect that the fragmentation of the railway network had had on both safety and maintenance procedures.
In February 1999 the company launched a bond issue which caused a significant fall in Railtrack's share price.[6]
Railtrack was severely criticised for both its performance in improving the railway infrastructure and for its safety record. Between its creation and late 1998, the company had a relatively calm relationship with its first economic regulator, John Swift QC, whose strategy was to encourage Railtrack to make commitments to improvement.[7] But critics said that the regulator was not tough enough and that the company had, as a result, been able to abuse its monopoly position. In particular, its customers, the passenger and freight train operators, were desperate for regulatory action to force the company to improve its stewardship of the network and its performance. Swift had been appointed rail regulator in 1993 by the then Conservative transport secretary John MacGregor MP. When the Labour government took over after the general election in May 1997, the new transport secretary (and deputy prime minister) John Prescott took a much harder line. When Swift's five-year term of office expired on 30 November 1998, he was not reappointed.[8] After an interim holding period, during which Chris Bolt, Swift's chief economic adviser and effective deputy, filled the regulator's position, in July 1999 a new rail regulator began a five-year term, and a new, much tougher regulatory era began.[9]
The new rail regulator, Tom Winsor, had been Swift's general counsel (1993–95), and adopted a more interventionist and aggressive regulatory approach.[10] At times the relationship was stormy, with Railtrack resisting pressure to improve its performance. In April 2000 it was reported in the Guardian that "Railtrack is adopting a deliberate 'culture of defiance' against the rail regulator".[11] Gerald Corbett, Railtrack's chief executive at the time, and Winsor clearly saw things very differently to each other. Railtrack resisted regulatory action to improve its performance, and as the regulator probed ever more deeply, serious shortcomings in the company's stewardship of the network were revealed.[12]
It was the Hatfield crash on 17 October 2000 that proved to be the defining moment in Railtrack's collapse.[13] The subsequent major repairs undertaken across the whole British rail network are estimated to have cost in the order of £580 million. According to Christian Wolmar, author of On the Wrong Line, the Railtrack board panicked in the wake of Hatfield.[14] Because most of the engineering skill of British Rail had been sold off into the maintenance and renewal companies, Railtrack had no idea how many Hatfields were waiting to happen, nor did they have any way of assessing the consequence of the speed restrictions they were ordering - restrictions that brought the railway network to all but a standstill.[15]
Regulatory and customer pressure had been increasing, and the company's share price began to fall sharply as it became apparent that there were serious shortcomings in the company's ability to tackle and solve its greatest problems.[16]
In February 1999 the company launched a bond issue which caused a significant fall in Railtrack's share price.[6]
Railtrack was severely criticised for both its performance in improving the railway infrastructure and for its safety record. Between its creation and late 1998, the company had a relatively calm relationship with its first economic regulator, John Swift QC, whose strategy was to encourage Railtrack to make commitments to improvement.[7] But critics said that the regulator was not tough enough and that the company had, as a result, been able to abuse its monopoly position. In particular, its customers, the passenger and freight train operators, were desperate for regulatory action to force the company to improve its stewardship of the network and its performance. Swift had been appointed rail regulator in 1993 by the then Conservative transport secretary John MacGregor MP. When the Labour government took over after the general election in May 1997, the new transport secretary (and deputy prime minister) John Prescott took a much harder line. When Swift's five-year term of office expired on 30 November 1998, he was not reappointed.[8] After an interim holding period, during which Chris Bolt, Swift's chief economic adviser and effective deputy, filled the regulator's position, in July 1999 a new rail regulator began a five-year term, and a new, much tougher regulatory era began.[9]
The new rail regulator, Tom Winsor, had been Swift's general counsel (1993–95), and adopted a more interventionist and aggressive regulatory approach.[10] At times the relationship was stormy, with Railtrack resisting pressure to improve its performance. In April 2000 it was reported in the Guardian that "Railtrack is adopting a deliberate 'culture of defiance' against the rail regulator".[11] Gerald Corbett, Railtrack's chief executive at the time, and Winsor clearly saw things very differently to each other. Railtrack resisted regulatory action to improve its performance, and as the regulator probed ever more deeply, serious shortcomings in the company's stewardship of the network were revealed.[12]
It was the Hatfield crash on 17 October 2000 that proved to be the defining moment in Railtrack's collapse.[13] The subsequent major repairs undertaken across the whole British rail network are estimated to have cost in the order of £580 million. According to Christian Wolmar, author of On the Wrong Line, the Railtrack board panicked in the wake of Hatfield.[14] Because most of the engineering skill of British Rail had been sold off into the maintenance and renewal companies, Railtrack had no idea how many Hatfields were waiting to happen, nor did they have any way of assessing the consequence of the speed restrictions they were ordering - restrictions that brought the railway network to all but a standstill.[15]
Regulatory and customer pressure had been increasing, and the company's share price began to fall sharply as it became apparent that there were serious shortcomings in the company's ability to tackle and solve its greatest problems.[16]
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