HC Deb 28 March 1994 vol 240 cc485-6W
Mr. George Howarth

To ask the Secretary of State for Transport what is his estimate of additional costs in overall rail subsidy which will be necessary to pay for consultants and to cover additional administration arising out of rail franchising.

Mr. Freeman

It is not possible to separate the costs specifically associated with franchising from the overall cost of restructuring the railway industry. Although there will be some additional administration costs arising from the restructuring of the railway in April, we believe that, over time, these will be more than offset by the efficiency savings privatisation will bring.

Mr. George Howarth

To ask the Secretary of State for Transport (1) what is his estimate of the financial effects of rail franchising of the services subsidised by passenger transport authorities or executives on routes where track is shared with InterCity or Regional Railways where charges are currently made only for marginal costs; and what is his estimate of the financial effects on such services of the requirement to pay a proportionate share of administration costs;

(2) what effect changes in charging procedure as a result of rail franchising will have in respect of subsidies for services subsidised by passenger transport authorities or executives; and if he will make a statement;

(3) what is his estimate of the percentage increases in passenger transport executive Railtrack access charges for 1994–95, 1995–96 and 1996–97, compared to the present charges for each executive.

Mr. Freeman

It is not possible to draw a direct comparison between the various elements of the charges currently paid by the passenger transport executives to BR under their section 20 agreements, under which the PTEs have paid the net marginal cost of their services to BR, and the charges that will apply under the new regime, under which PTE services will carry an appropriate share of infrastructure charges and central overheads. From April 1994 the PTEs will be treated on the same basis as the franchising director, paying subsidy to the company operating their services, which will in turn need to pay access charges to Railtrack.

We expect the headline cost to PTEs of maintaining existing service levels to increase under the new regime, but we have undertaken to cover the increased cost in 1994–95 by making special grant payments to them, and, thereafter, to enhance the provision made in the section 20 bolt-on for their constituent metropolitan district councils.