British Rail privatisation delayed until 1995

RAIL privatisation is to be delayed a year until 1995 because the reorganisation of British Rail is far more complex and time-consuming than ministers expected.

Privately, BR sources believe that the Government will be lucky to have any franchises up and running in 1995. One manager said: 'They may get a private operator for Gatwick Express.'

BR's board has told the Department of Transport (DoT) that safety cannot be guaranteed if it is forced to meet the 1994 deadline of letting out franchises to private sector operators because managers' workloads will be too great.

BR's track and signalling arm is to become a new organisation, Railtrack, in April 1994, and ministers wanted franchises offered to the private sector soon after.

However, BR wants the new system of having a separate track authority to run for at least a year, until April 1995, before franchises are offered. A source close to the board said: 'You've got to let this be tested for a year. We can't sell it before we know that the new system works.

'The Government has completely underestimated the complexity of this. This is virgin territory, which hasn't been done anywhere else in the world. The scale of change is awesome. Everything we do has to be made into a legal contract - who cleans the trains, who maintains them and how often, who runs the stations when they are shared by different franchisees and so on. We're spending all our time doing this.'

Sir Bob Reid, the BR chairman who is sceptical about privatisation, said recently there were 14,000 points where interaction between different arms of BR needed to be set out in a formal legal contract. Each of BR's recently established 25 profit centres is having to be split into a Railtrack component and the rest.

A ban on senior managers becoming involved in bids before April 1994 is adding to the franchising delay. Last week, the chief executive, John Welsby, wrote to senior managers warning them that if they become involved in buy-outs before that date they would be sacked.

BR's board has been increasingly worried about the safety implications of allowing managers to pursue buy-outs. Many senior staff are spending three-quarters of their time on dividing the railway. The board does not want them drawing up management bids simultaneously.

The DoT said of the 1994 target: 'We are confident that BR will be making the preparations and providing the resources necessary to achieve this aim.'

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