New doubts over west coast line as rail costs soar

The delayed and vastly over-budget modernisation of the rail route between London and Glasgow may never be completed, as the rail regulator attempts to contain soaring costs.

Track upgrades on the line are 43 per cent more expensive than anywhere else on the system and the price of installing new signalling is twice the national figure, the infrastructure organisation Network Rail admitted yesterday.

Completion of the £10bn project to improve the west coast main line might have to be postponed for a year to save money or "may not be done", the rail regulator, Tom Winsor, warned. That would not affect the plan to introduce a 125mph tilt-train service between London and Manchester by September 2004, but would affect achievement of similar speeds up north by 2006.

Delaying work on the flagship line, originally costed at £2bn, could save £1bn, the rail regulator believes. The consultants Booz Allen Hamilton, commissioned by Mr Winsor, identified "major weaknesses" in management of the project. There was a "critical lack of knowledge" about the condition of the infrastructure and a "poor definition" of the work required for enhancing the route. Identification of roles and responsibilities was "weak" and the work was "poorly organised", the consultants' report found.

But a spokesman for the Strategic Rail Authority said the report was out of date. "The worry is with any delay we are not guaranteed to make cost savings but we are guaranteed to lose momentum. We don't need to have a pause to achieve the cost savings needed.''

Chris Green, chief executive of Virgin Trains, the main operator on the route, said his company would "vigorously" oppose any attempt to delay or curtail the project. Virgin Trains has been paid £106m by the Strategic Rail Authority in compensation for previous delays and the operator receives more than £500m a year in state subsidies on top.

Mr Winsor's damning verdict came as part of his review of the fees paid by operating companies for using the national network, which is owned and maintained by the "not-for-profit" Network Rail. The regulator will set the charges to be paid by train companies in December, but yesterday he made clear that the infrastructure organisation would have to slash billions from its costs. Expenditure for 2004-05 ought to be £5bn, at least £1bn less than the organisation wants to spend, Mr Winsor said.

Tim Collins, the Conservative transport spokesman, said Alistair Darling, the Secretary of State for Transport, had given a commitment to Parliament in April that he would ensure the west coast main line was upgraded. "I am calling on him to make clear whether he stands by his promise," he said.