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28 January 2010

(S3O-9282) Rail Projects (Funding)

11. Charlie Gordon (Glasgow Cathcart) (Lab): To ask the Scottish Executive what criteria it uses in deciding to fund some rail projects from borrowing via Network Rail's regulatory asset base. (S3O-9282)

The Minister for Transport, Infrastructure and Climate Change (Stewart Stevenson):

To be eligible for regulatory asset base finance, the expenditure must relate to a project that will create assets that will be owned by Network Rail. Any decision on funding mechanisms is considered on a case-by-case basis and must demonstrate value for money in accordance with the requirements of the Scottish Government value-for-money guidance.

Charlie Gordon: Aside from the irony that the criteria apparently do not include rail projects that were approved via a full act of the Parliament, such as the Glasgow airport rail link, does the minister not see the inconsistency in his criteria, which lead, according to one of his recent parliamentary answers, to spending money that John Swinney claims we do not have on rail projects such as Glasgow crossrail, which I support but which will not stack up without the Glasgow airport rail link?

Stewart Stevenson: Perhaps I should make a couple of points in response to Mr Gordon's comments. In my initial answer, I said

"the expenditure must relate to a project that will create assets that will be owned by Network Rail".

In the case of GARL, it is clear that rebuilding a car park, providing a new nursery and relocating a fuel farm at the airport do not meet that test.

I simply point out that one important feature of regulatory asset base finance that we must recognise is that, like any source of finance, it is finite. Control period 4, which runs from 2009 to 2014, was agreed some time ago. We will of course continue to consider regulatory asset base finance when it is appropriate and delivers value for money.

Jeremy Purvis (Tweeddale, Ettrick and Lauderdale) (LD): The Scottish Government ruled out using the regulatory asset base for the Borders railway and is instead using a private finance initiative variant—a capped profit return, wholly privately financed construction. Will that depend on revenue that is raised on the line? Will the minister give a categorical assurance that ticket pricing on the Borders railway will be no different from pricing in any other part of the network in Scotland?

Stewart Stevenson
: The Government expects to contribute to the revenue costs of trains that run on the Borders line, as we contribute to the great majority of lines throughout Scotland. I expect the cost per kilometre on the Borders railway to be substantially similar to that elsewhere in the network.

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