UK - The Railtrack Shareholders Action Group (RSAG) has criticised the Strategic Rail Authority's (SRA) plan to revitalise Britain's crumbling rail network.
The SRA plan would pump £30bn of private sector funding into the rail system in addition to £33.5bn of public money.
RSAG consists of leading institutional shareholders holding in excess of 49% of the issued shares of Railtrack. RSAG believes that the cost of the plan will substantially increase unless the government is seen to deal fairly with its members.
Simon Haslam, chairman of RSAG, said: “There is no doubt that the risk premium for dealing with the UK government has increased. As RSAG embark on the legal process forced on us as the only way shareholders seem able to receive fair value for their assets that were taken from them, the risk premium is bound to increase.
“If private sector lenders just 0.5% extra to cover the increased risk of government intervention at some future date, this will cost £1.5bn over 10 years. In my view lenders will actually look for a higher risk premium than that.”
RSAG plans to serve papers on the Treasury Solicitor this week in preparation for application to the High Court for an order requiring the government to release documents relating to Transport
Ben Herbert, a spokesman for the Department for Transport, Local Government and the Regions, said the government remained confident it would secure private sector funding and that it had met and continued to meet banks and other parties interested in investing in the railways.
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