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EDITIONS
Thursday, 10 October, 2002, 13:16 GMT 14:16 UK
West Coast Mainline
Bad news and good news for train travellers today - the much-maligned west coast line will be improved, but not as fast as we were told it was going to be.

Trains will go faster, but not as fast as we were told they were going to go.

The cost will be high, in fact 6 times higher than the original estimates - it sounds like a terrible mess, the epitome of British Fail, but the powers that be believe they've found the only workable solution to a huge transport problem.

Jeremy Vine spoke to the Secretary of State for Transport, Alistair Darling, and asked him how much of the cost of upgrading the West Coast Mainline would fall on the tax payer?

ALISTAIR DARLING:
(Transport Secretary)

We think the total cost will be just over 10 billion. Nearly 75% of that will be the money that we need to spend simply to bring the line up-to-date. It last saw a serious upgrade in the 1960s and the early 1970s. So the price we're having to pay for nearly 40 years of lack of maintenance accounts for 75% of the money we have to pay on top of that.

JEREMY VINE:
But, minister, I'm asking what the final bill for the taxpayer is.

ALISTAIR DARLING:
The improvements will be paid for by Network Rail, the new company responsible for owning the railway. It gets track access charges from the trains that use it, part of which come through the train companies which receive money from the Government. The final amounts will depend on a number of factors - not just the final bill, but also as a result of the review of charges which the rail regulator is currently carrying out.

JEREMY VINE:
So when we're looking at your figure of 10 billion to get the rail line up to scratch by 2008, you can't tell us how much of that will be taxpayers' money?

ALISTAIR DARLING:
It will be a combination of both.

JEREMY VINE:
I know it will, but you can't tell us how much the taxpayer's paying.

ALISTAIR DARLING:
The rail regulator is currently carrying out his interim review of the level of charges. That will influence how much Government pays to the rail companies that operate it. One way or another, money will have to be spent to upgrade this railway line which last saw serious investment nearly 40 years ago.

JEREMY VINE:
But it is the pricing and funding that is of such crucial importance. The reason I ask that is that of the 65 billion that you need for the railways in the next 10 years, 35 billion is public money, the other 30 billion is private money. We don't know how much of that 30 billion has been raised, do we?

ALISTAIR DARLING:
We do. We know that a lot of the investment currently going into the system, for example, the new Virgin trains that are currently running on the west coast and cross-country routes, they are provided for and paid for by the Virgin rail group. They receive money from Government. You are seeing here a combination of public and private money coming together going into the railways.

JEREMY VINE:
Looking at that larger figure, can you tell us then how much of the 30 billion that you need over the next 10 years has been raised by the private sector?

ALISTAIR DARLING:
I can't give you an exact figure. The money being spent on the railways is a combination of money coming in from both public and private sectors.

JEREMY VINE:
Of course it is.

ALISTAIR DARLING:
That must be better than the cost just falling on the taxpayer, as it would've done under the old system.

JEREMY VINE:
But the situation you're in now, making promises about upgrades, means everything is a pipe dream until you raise the private money?

ALISTAIR DARLING:
No, it's not. We are confident that with the new plan that the Strategic Rail Authority has announced today, we can get that line upgraded. We can do it at the cost indicated. The money will come from the private sector, because Network Rail is a company operating in the private sector. Its surpluses go back into the railways. There is also money coming in through the train operating companies. That must be a far better solution than simply all of the money coming from the public sector, which would have happened in the old days.

JEREMY VINE:
You could certainly get the money from the private sector. But since your Government put Railtrack into administration, the City has had jitters about these kinds of projects. You will be punished when you ask for private money because you'll have to pay higher interest rates.

ALISTAIR DARLING:
That's not right, either. When Network Rail was set up, people said, "You won't be able to get the private sector money in to finance it" and then said, "And you'll have to pay over the odds." Well, Network Rail has been able to raise the money at the time it indicated. The rates it's getting are much the same as it would have got prior to the Railtrack business.

JEREMY VINE:
What rates are they getting for upgrading the West Coast rain line?

ALISTAIR DARLING:
Agreements as to the money to do this particular project have not yet been struck. Remember, what is being announced today is a plan for upgrading the West Coast Main Line. That money will come through Network Rail. Clearly, there is work to be done to nail down every corner of the agreement that has to be reached. This must be infinitely better than the old days when the entire bill fell on the public purse. Indeed, that is probably why for nearly 40 years nothing was done. Successive governments knew the entire bill was going to fall on the public purse and so did nothing.

JEREMY VINE:
What about the risk, though? The entire risk falls with you, with the taxpayer and with the Government? These projects can't be allowed to fail. If you look at the Channel Tunnel rail link, when the private company that had promised it was going to do it got its figures wrong, it had to be helped with 4 billion of public money.

ALISTAIR DARLING:
Yes, but there is also private money going in. There is private sector expertise and managing contracts.

JEREMY VINE:
They are not taking the risks. That is the point.

ALISTAIR DARLING:
The risk is shared in many ways. You are right, but it is unlikely that any British Government would say we shall have no railways. That's never been the position. That is a ridiculous position to take. I repeat the point. The advantage of having public and private sector working together is that both are contributing. There is a better chance of getting this project earlier than would have been so in the old days.

This transcript was produced from the teletext subtitles that are generated live for Newsnight. It has been checked against the programme as broadcast, however Newsnight can accept no responsibility for any factual inaccuracies. We will be happy to correct serious errors.

We are confident that with the new plan that the Strategic Rail Authority has announced today, we can get that line upgraded.

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Alistair Darling
"We are confident... that we can get that line upgraded"

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