Born in 1946 and brought up in Cupar, Fife, I was educated at the local school - First ScotRail Franchise
12. Karen Whitefield (Airdrie and Shotts) (Lab): To ask the Scottish Executive what the cost to the public purse is of extending the ScotRail franchise. (S3O-3360)
The Minister for Transport, Infrastructure and Climate Change (Stewart Stevenson): The extension of the ScotRail franchise is expected to reduce the net cost to the public purse over the period to 2014.
Karen Whitefield: Is the minister aware that FirstGroup's ScotRail operating profits were reported as £11.4 million for 2006-07? Why, then, when extending the rail franchise, did he allow for up to £30 million of profits to be retained by FirstGroup annually before being capped? Why did he decide to move away from the Scottish National Party's pre-election commitment to consider running Scotland's railway through a not-for-profit trust, which would have ensured that all the operating surpluses were invested in our rail network?
Stewart Stevenson: It is always interesting to hear policy changes announced from the Labour benches. I will listen with interest to next week's episode.
The member is correct to point to £11.4 million of operating profits in 2006-07. I thought that the member was present when I gave evidence to the Transport, Infrastructure and Climate Change Committee on that very subject, in which I indicated that profits for the ScotRail franchise are rising rapidly. In consultation with external financial consultants, we estimate that profits will approach the £30 million cap that we have put in place, thus unreasonable profits will not be made by our franchisee. That is on top of the return of £70 million, regardless of performance—in other words, guaranteed—for us to invest in new railway services and new facilities throughout Scotland, including priced option 8, which provides for additional services to Shotts.
Alex Johnstone (North East Scotland) (Con): Will the minister listen to an alternative version of that question, in which I ask him to confirm the benefit to the public purse of extending the ScotRail franchise?
Stewart Stevenson: There is substantial benefit from extending the ScotRail franchise. As a North East Scotland MSP, the member will be well aware of the improvements in rail services between Dundee and Aberdeen and between Aberdeen and Inverurie, which have created hourly services. Those improvements have put the most cost-effective parts of the long-discussed proposals for Aberdeen crossrail into operation, using money provided by the franchisee, not the Government.
