Buoyant BR will avoid big cuts

British Rail will manage to avoid drastic cuts in services over the next year thanks to the upturn in the economy which has led to increased passenger numbers.

BR has been in lengthy negotiations with the Department of Transport over its finances because of an estimated £400m shortfall for the current year due to the signal workers' strike, the late opening of the Channel tunnel and the cost of rail privatisation.

However, in evidence to be presented today to the Commons Select Committee on Transport which has launched an investigation into the rail industry's finances, BR says that it will manage to overcome last year's shortfall and a further cut in government subsidy of £500m due to increases in revenue.

There will also be cuts to Railtrack's projected £500m investment programme, but the extent of these has not yet been determined. Some limited cuts have been announced, including the scrapping of Motorail and many sleeper services, and the reduction of off-peak services on the Great Eastern network.

When they were announced, ministers intervened and told BR not to make any further reductions and, after lengthy negotiations, BR now expects that the May 1995 timetable - to be published soon - will be the same as the current one, apart from the usual minor changes.

BR's financial situation has been helped by a more rapid than expected return of passengers to the network following last year's strikes which cost £170m. "We are back at pre-strike levels," said an industry source.

"With much greater economic growth, BR is now confident passenger numbers will rise faster than expected and it only needs a 1 per cent increase to bring in an extra £210m in a year."

BR's submission coincides with yesterday's announcement by Roger Salmon, the franchising director, of the "passenger service requirements" for four of the first lines to be privatised - Great Western, Gatwick Express, South West trains and London, Tilbury Southend.

Mr Salmon, who is responsible for setting minimum train service frequencies, has decided to require franchisees to guarantee only about 80 per cent of the existing trains, paving the way for possible cuts in services.

He said that he will ensure that most heavily loss-making services will be retained by the private operators who are due to start to take on the franchises within the next year.

However, certain trains not included by Mr Salmon, such as the daily service linking Carmarthen with Paddington, the Fishguard boat train and two of the six daily services to Penzance, look likely candidates for cuts.

Where services are "commercially viable", Mr Salmon's requirements are far below those of the existing timetable because he feels that the extra services will be worth running for commercial reasons.