Railtrack boss quits amid U.K. travel chaos

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LONDON, England (Reuters) -- The boss of British rail infrastructure firm Railtrack quit on Friday after weeks of travel chaos proved the final straw for passengers fed up with the nation's creaking railway system.

Gerald Corbett's resignation marked the end of an era, when the recently privatized firm bore the burden of decades of state neglect. He is handing responsibilities to Finance Director Steven Marshall just as the government steps up investment in the network.

Corbett had offered to resign last month after four people died in a train crash north of London, but he received strong support from passenger groups and the board kept him on.

But Railtrack, which is responsible for maintaining the country's tracks and stations, said on Friday that Corbett felt it was time to go now that steps had been taken in the wake of the Hatfield crash to improve safety on Britain's railways.

"It's been an exciting three years but I think it's right to step down," Corbett told reporters after the announcement.

Some analysts said Corbett had let down not only the public but shareholders as well, pointing to a drop in profits over the past year, including a 30 percent drop in first half pre-tax profit to 175 million pounds ($250 million) posted on Monday.

Britain's Labor government had also piled pressure on Corbett, as public disgruntlement with public transport is costing it precious political points.

But investors have generally held Corbett in good regard, saying he was partly the victim of gross state underinvestment before the railways were privatized in the mid-1990s.

Now that regulators have set aside 14.9 billion pounds of mostly state funds for the network over the next five years, prospects for the company and travelers look brighter.

"The government didn't spend anything on the rail system for more than 50 years and all that underinvestment has come back to haunt the UK," said David Winters, a New Jersey-based director of research for Franklin Mutual Advisers, a major shareholder.

"Marshall is very competent. There's huge upside value inside Railtrack, and it's in everyone's best interest inside the UK to get this whole thing sorted out as quickly as possible."

Last month's crash at Hatfield, thought by investigators to have been caused by a broken rail, marked the beginning of massive rail disruption, with Railtrack imposing speed limits around the country while it carried out emergency repairs.

The repairs to more than 250 miles (402 kilometers) of track and 850 sets of points across the network are likely to plague commuters well into next year.

But passenger anger is the tip of an iceberg for Railtrack.

Over the past year, the company has been repeatedly battered by criticism for its safety record, punctuality and management.

Last month's crash -- which came one year after 31 people died in a crash in London -- has reawakened public fears about rail safety. It has also rekindled lingering complaints that Railtrack has paid too much attention to shareholders at the expense of passengers.

Ironically, Railtrack's prospects are beginning to look brighter thanks to Corbett's success in softening regulators' approach towards the company.

Britain's rail regulator last month loosened its grip on the amount of income Railtrack is allowed to earn, while also making the 14.9 billion pounds of mostly state funds available.

The regulator's review was more lenient than anyone in the industry had expected and should mean good news for both Railtrack and rail passengers over the next year.

Copyright 2000 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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