Government could boost rail work and target fare dodgers in £250m package

The government is considering a £250m stimulus package for the railways aimed at boosting revenues and passenger numbers.

It is understood that Network Rail, the owner of Britain's rail infrastructure, has been asked to select projects that can be brought forward at a cost to the taxpayer of between £200m and £250m. The government has ruled out giving money to train operators struggling with expensive franchise contracts, but they are expected to benefit from the expenditure. The package, if agreed, could be timed to coincide with the budget later this month.

The measures are expected to increase train operator revenues by clamping down on fare dodgers, and increase passenger numbers by making rail travel more attractive for less frequent train users. Network Rail is considering investing the money in improving station access, which train operators believe will boost off-peak travel by attracting the elderly and mothers with young children.

Train operators are keen to sell more off-peak tickets because they are contracted to run a high number of services during quiet times of day, when there is less demand from commuters.

Network Rail is also considering bringing forward investment in ticket barriers. Fare dodging is thought to cost the industry 5% of its annual revenues, or about £270m, and the transport secretary, Geoff Hoon, has asked train operators to propose gating schemes. Lord Adonis, the rail minister, told the Guardian last month that such a scheme would be popular. "There is wide support from passengers for gating because they don't like huge amounts of people not paying for fares that they then have to subsidise." Station car parks would also benefit from the programme.

The potential investment was welcomed by environmental and public transport groups, who have written to the chancellor, Alistair Darling, to request a local transport stimulus in the budget. "We welcome this and it will encourage people to use trains rather than cars," said Stephen Joseph, executive director of the Campaign for Better Transport.

This month Network Rail embarked on a five-year £35bn spending programme including the construction of Crossrail, which will connect Canary Wharf to Heathrow, and an overhaul of the Thameslink rail route through central London.

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