Regulatory Control of the Track Access Charges of Railtrack plc

Railtrack plc, floated in 1996, was the private sector owner of Britain's railway track, signals and stations. Its major source of revenue came from track access charges, which individual train operating companies (TOCs) paid for use of the infrastructure. Since many of these TOCs received substantial subsidies to assist in paying their track access charges, Railtrack was in effect being heavily subsidised. In October 2001, the Government decided that these arrangements were no longer viable and placed Railtrack into administration. This article explains how the level of indirect subsidies to Railtrack had become excessive, and raises crucial questions that need to be addressed in settling the future shape of the railway industry.