A multi-billion pound project to upgrade train services to Watford Junction is the latest casualty in the rail industry crisis.

Plans to have 140 mph trains running on the West Coast Main Line through Watford will be scrapped, after an agreement between Virgin and Railtrack.

And less ambitious aims to improve rail services on the busy commuter line described by Virgin's Mr Dennis Lovett as a "400 mile building site" are running behind schedule.

It is the latest bad episode in a saga which has been running since 1988, when the upgrade was first mooted.

The misery for rail users was not alleviated by the admission this week that Silverlink is in financial difficulty and will not improve its "slow, unreliable and overcrowded" services. There is also renewed uncertainty about the future of the Abbey Line between St Albans and Watford Junction.

The news about the Main Line does not come as a surprise to observers of the rail industry, and only confirms speculation which has been circulating for months.

Speaking to a meeting of the Watford Rail User's Group (WRUG) on Monday, Mr Lovett who was late because of a delayed train said the company had submitted a rescue package to the Government.

He said Virgin was still committed to implementing the £4.2 billion second phase of the modernisation project.

But one of the options given to the Government is to block the full upgrade.

And, according to documents leaked to rail magazines, Virgin has agreed to bury the upgrade plan.

Mr Lovett said he did not know which of the options the Government would decide to back.

But, with project costs having risen by £5 billion over original estimates, the temptation to save £2 billion is expected to be overwhelming.

Mr Lovett would not comment on the revelation of secret agreements between Virgin and Railtrack to scrap the plans, except to say: "That information was not intended for the public."

He said the problems were caused by Railtrack, which was declared bankrupt in October by Transport Minister Stephen Byers.

Mr Lovett said: "Failing to deliver is outside our control. We can only respond to the situation Railtrack is in."

Nonetheless, it brings into question Richard Branson's promise in 1997 to deliver a world class railway in five years time.

Representatives of Railtrack and the Government's Strategic Rail Authority were invited to the WRUG meeting, but both declined to put their case.

Mr Lovett was quick to stress Virgin's part of the £2.1 billion phase one was "on target and on budget".

This phase will allow 125 mph running, and new trains should be delivered by the end of the month.

Mr Lovett said five fast trains an hour would stop at Watford Junction, addressing fears it would be sidelined in favour of Milton Keynes. An equal number of trains will serve each station, but no train will stop at both.

Speaking at the same WRUG meeting, Mr Keith Tullett, Silverlink's manager at Watford Junction, said he could not offer assurances the Abbey Line was safe.

He said: "With Railtrack in the state they are, who knows."

Mr Tullet accepted services were "slow, unreliable and overcrowded", but said the company would not invest in new trains unless it was awarded the franchise to run services after it expires in two years' time.

November 19, 2001 12:00