MINISTERS are determined to press ahead with the timetable for privatising British Rail following the settlement early yesterday of the four-month signalmen's dispute.
But some analysts believe potential investors in the network may hold back until the full costs and impact of the strikes on passenger and freight traffic are apparent.
The first of the 25 franchises are due to be offered forsale next spring, some six months later than planned. But this date may slip while the network gets back to normal and absorbs theestimated £200-£300 million cost of the stoppages.
Airlines and coach operators have reported a rise in passengers and the railways may have a problem winning them back.
As Railtrack and the Rail Maritime and Transport union each claimed victory, the main concern of ministers was to restore public confidence in the network ahead of privatisation.
Dr Brian Mawhinney, Transport Secretary, said that the restructuring package, agreed at 5am yesterday after 60 hours of talks, would make the network more attractive to investors by abolishing archaic working practices and putting it on a more business-like basis.
"Those who will want to buy in - and I have no doubt there will be plenty of them - will want to buy in to an industry which is in better shape," he said.
But Mr Stephen Joseph, of the pressure group Transport 2000, said there was little enough City interest in buying into the railways before the dispute.
"The dispute has made the privatisation of the passenger services and of Railtrack almost
unsaleable," he said.
Mr Frank Dobson, the Labour transport spokesman, said the dispute had been the "last nail in the coffin" for rail privatisation.
However, the Office of Passenger Rail Franchising said there had been "no lessening of interest".
Ministers maintain the deal was consistent with the Government's public sector pay policy as the increase is "self-financing" - even though it is greater than the 2.5 per cent guideline.
A strike by London Underground workers planned for tomorrow could be postponed for a week.
London Underground said it expected formal notification this morning that the RMT union is
prepared to delay the 24-hour walk-out in an attempt to find a settlement to the pay dispute.
The strike was called after the RMT's 8,000 tube members rejected a two per cent pay offer which was later increased to 2.5 per cent.
