Rail debt on track to hit £4.9bn within four years

The nation's rail debt is expected to continue to rise.
The nation's rail debt is expected to continue to rise.
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Investments in Scotland’s rail network such as the new line in the Borders are being funded by record levels of borrowing by the Scottish Government.

The country’s total rail debt is expected to reach £4.9 billion by 2019, up from £2.6bn in 2009, according to the Office of Rail and Road (ORR).

High-profile projects such as the on-going Edinburgh-Glasgow mainline improvement programme as well as the reopening of a rail link to the Borders in September have pushed up borrowing levels in recent years.

The debt is financed by Network Rail, owned by the UK government. Total Network Rail debt across the UK now stands at almost £38bn.

It borrows on favourable on terms as it is underwritten by Westminster and UK tax payers.

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This arrangement could end, however, if the Conservative government decided to privatise Network Rail, or restructures it along regional lines.

Transport Scotland pays Network Rail directly for the cost of the borrowing, with money granted from the Scottish Government.

Figures released by the ORR estimate that over the next four years Transport Scotland will pay £868 million in financing fees and interest.

The debt could be as low as £4bn by 2019, depending on Transport Scotland spending over the next five years. A Transport Scotland spokesman said: “Whilst debt levels are rising, the value of the rail asset base has also risen [and is] forecast to remain stronger than the UK average and all other Network Rail operating routes south of the Border.

“Network Rail’s operation, maintenance, renewal and enhancement costs in Scotland have been met almost entirely by the Scottish Government since railway powers were devolved in 2005 and this position will continue regardless of any structural changes.”

The Scottish rail network, in line with the rest of the UK, has witnessed several major refurbishment and expansion projects since the turn of the century as passenger numbers continue to grow.

The new Borders railway was the longest to be built in Scotland since the Fort William-Mallaig line opened in 1901 and is believed to be the longest line re-opening ever in Britain.

Passengers have complained of suffering a “miserable” service on the new line with more than two in three trains arriving late. Supporters blamed the poor punctuality on ScotRail using its least reliable trains, along with cutbacks to the length of double track.