UPDATE NUMBER 22. AUTUMN 2002

ONE MAJOR STEP COMPLETED !

Corus Rail Consultancy have produced a full set of alignment drawings with proposals for all the
necessary new or refurbished structures. Some will need walkways added to comply with current
safety regulations; this may need careful detail work to ensure they are visually acceptable - but
it is all possible, with realistic costs calculated from other recent projects.

Approximately £95,000 has been spent on survey, design and development - all within budget!

Consultations will also take place regarding possible stations and other features along the line.
The plans take account of life around the line as it is today and consideration of possible future
developments which may complement or threaten the line.

Keswick Station is a natural focus for attention and the Virtual Reality Model will be used to
bring drawings and proposals "to life" for planning authorities and other interested parties.

CKP Railways plc, Corus Rail Consultancy and Brown & Root have worked together through a
"Project Executive Team" to develop these plans, pooling experience from many current and
recent construction projects, and helping sow the seeds for more. This approach means that the
value of all money spent has been multiplied many times as the expertise is shared.

THE NEXT BIG STEP

The other major technical element of the application for the Transport and Works Order (TWO)
is the Environmental Impact Assessment (EIA).

This has to be based on the developed design for the line and address a wide range of factors
including effects on the landscape, wildlife, people and communities, road traffic, noise and
pollution (created by or reduced by operation of the Railway).

The aim is to provide answers to all the questions which planning authorities, regulatory bodies,
residents and other interested parties would ask.

This part of the work is also predicted to cost in the order of £ 95,000.

Once the EIA is complete the Application for the TWO can be put together and delivered to the
Secretary of State for Transport. That requires some specialised legal work but there are
published guidelines to follow. The Application would be the third major step in the planning of
the railway - taking longer than construction but every bit as important.

One big step has been taken - after each step the way ahead becomes shorter and clearer.

Construction of the line can draw in commercial funding from a variety of sources which would
not fund the current development work.


FACT OR FICTION ?

Two members of the Lake District Transport Strategy Group of Capita DBS (formerly Cumbria
County Council's traffic consultancy group) recently suggested that re-construction of the
Keswick to Penrith railway would be too expensive, arguing that improvements to bus services
would be cheaper and more effective, and promoting a large "Park and Ride" site near Kendal as
the answer to traffic problems in the central Lake District.

Their paper appeared in "Focus", the journal of the Institute of Logistics and Transport (ILT),
in October 2002. The authors suggested costs for construction of the Keswick to Penrith line
without consulting CKP Railways plc. The authors quoted a figure almost 50% higher than their
own Engineers had calculated just five years ago.

Construction costs in general have certainly not increased by anything like that percentage, and
no justification was provided for the conclusions. The local Authorities have a study jointly
funded by them in 1996/7 which estimates construction costs at £24.2 million.
To quote any other figure is therefore unjustified speculation.

A response was rapidly put together by Cedric Martindale, assisted by the Committee of the
Lancashire and Cumbria branch of the ILT to appear in the November edition of Focus.
There were only three days available in which to do this !

In November the Lake District National Park Authority rejected the Park and Ride idea as
unacceptable in landscape terms.

Others - including Keswick Town Councilors - have been asking, via the County Council, why
the Strategy Group is so dismissive of solutions which people in the Lake District actually want,
and are prepared to support financially - such as the Keswick to Penrith Railway.

The County Council has been promoting capacity improvements on the Oxenholme to
Windermere rail line, but has not yet felt the need to support the Keswick to Penrith line which
would serve the North Lakes and ease traffic pressure on the A591 through the Central Lakes.

NO MONEY ABOUT ?

£65 million is to be spent upgrading less than 10 miles of the A74 north of Carlisle to Motorway
standard. Work on the Carlisle Northern Development Route (western bypass in effect) has also
been authorised. The budget includes some future maintenance work, but will still cost tens of
millions of pounds for only a few miles of new road.

So far the Strategic Rail Authority (SRA) has declined to fund the CKP project (and others

around the country), focusing instead on just the existing national network.

One key member of staff was paid £280,000 for relinquishing his contract early this Summer.

The SRA made an Operating Surplus of £ 51.9 million in the financial year 2001 - 2002.
CKP Railways plc had applied for approximately £12 million and was refused.

The project was eligible for Lottery funding, but the Millennium money was spent elsewhere.
European Funding objectives do not cover this area or type of project.

There are numerous other schemes which require lots of work to win small amounts of money.
This would prove an unnecessary distraction, so CKP will concentrate on funding from its own
supporters and future commercial prospects.


LOCAL DEVELOPMENTS

Update 21 reported on plans for an access road to an Industrial Estate development at Flusco
(less than 6 miles from Penrith) which would have damaged the Railway track bed.

As a result of correspondence with Eden District Council's Planning Department and attendance
at the Council's Planning Committee meeting, the developers modified their proposals, and
stated publicly that they would co-operate fully with the construction of the Railway.
Construction has started and has kept clear of the Railway trackbed.

The Keswick Country House Hotel (the original CK&PR Hotel at Keswick station) has now
transferred to the Choice Hotel Group based in Blackpool.

MORE BONDS ?

Most of the development work has been funded by the proceeds of the Bond issue in 2000 - 2001 which totaled £155,000, mainly from existing supporters of the project.

The existing Bonds pay interest at 4% (gross) per annum and will be redeemable in June 2010.

There have been many enquiries from existing Bondholders and new supporters - unfortunately each Offer can only remain open for six months and costs a significant amount to arrange with legal, accounting, printing and distribution all to be considered.

To keep the momentum going, CKP Railways plc is aiming to issue a further Prospectus on the 4th of March 2003, the anniversary of the last passenger train on the line in 1972.

Details of how to obtain the Prospectus will be given nearer the launch date.
This time around arrangements are being pursued to distribute details to a much larger audience through many publications which circulate throughout the UK and abroad.

MONEY NOT CLAIMED


By the end of October about sixty Bondholders had not cashed their Interest cheques, issued in July 2002. From January 2003 the Bank may reject them, and they are not all small amounts. Some have said that they do not intend to take the money, wanting it re-invested in the project. CKP Railways plc is very grateful for this generosity but there is one small problem.

Tax has to be paid on the cheques at the time they are issued.
If this year's outstanding cheques are not cashed, CKP Railways plc will have paid about £115 in tax which is difficult or impossible to recover. This can be avoided in the future if Bondholders write in advance to state that they do not wish to receive interest payments. The next Interest distribution will be calculated on the 30th of June 2003.

40 DAYS


CKP Railways plc intends to use the best available methods during construction. An Engineer from Grant Rail recently described techniques and equipment used in the USA and Ireland which could lay all the track between Keswick and Penrith and have it up to standard for full speed operation of passenger trains in only 40 days. Almost like laying 18 miles of carpet!

Before track is laid all the earthworks and bridges have to be in place. Most of the original line and structures still exist (despite what some people try to claim) and there are no obstacles which prevent the remainder being repaired or replaced using faster, easier modern methods. This stage would take a little longer, possibly 18 months as a co-ordinated professional project.