LONDON — The administrator to Railtrack PLC says the troubled company will need significantly more government money than the £3.5bn it has already borrowed, according to BBC News.
The government loan was paid to Ernst & Young [E&Y] to cover the period to 31 March, after Railtrack was put into administration on 7 October.
But more than half has already been paid to Railtrack’s creditors, according to E&Y joint administrator Alan Bloom.
The government wants Railtrack’s successor to repay the money, once the company comes out of administration.
‘Significant sum’
But if this is a non-profit company without shareholders, the government’s preference, taxpayers could end up footing the bill.
Mr Bloom told the Daily Telegraph: “We will make an application for some more [money]. We have already started talking to the government about provisional numbers. I know it will be a significant sum.”
It could be billions of pounds, he added.
The only possible sources of finance were the train operators and the taxpayer, he told the newspaper.
E&Y may also ask rail regulator Tom Winsor for an interim review of Railtrack to secure extra finance to 2006.
“The railway is an expensive thing to run,” Mr Bloom explained.
Ensuring Railtrack is transferred out of administration by the end of September would be challenging, he said, due to the likelihood that data on the condition of assets would not have been completed.
He concluded: “The more certainty we can give bidders the better, though we are well prepared to work around uncertainty as they are sophisticated purchasers.”