RECORD figures for passengers and turnover failed to prevent the Severn Valley Railway suffering a loss last year.

For the 16-mile steam railway, which runs from Kidderminster to Bridgnorth, also hit record levels of expenditure, giving rise to a loss of £30,703 for the year ending December 2001. This compared to profits of £5,184 the previous year which followed the company's record 1999 when profits reached £55,532.

In his annual report chairman Paul Fathers said the foot and mouth epidemic followed by the events of September 11 had caused severe problems to businesses depending on tourism. Railways in general had also suffered through accidents on the national network.

"Breaking two records in terms of passenger numbers and turnover was a remarkable achievement and reflects the commitment and enthusiasm of our supporters.

The railway carried 230,436 passengers during the year - an all-time record and 3,000 more than in 2000.

Trading turnover increased by more than £200,000 or 6.2 per cent to a new record of £3.43 million but increased costs included a marked rise in the price of coal and the doubling of insurance premiums in response to main line accidents.

The SVR had carried out an ambitious £390,000 investment programme during the year and increased expenditure had been largely due to locomotive repairs and maintenance following a spate of boiler problems the previous year.

Part of the former Highley colliery yard had been purchased for £32,000 with a view to providing covered accommodation for locomotives awaiting restoration.