HC Deb 10 July 2002 vol 388 cc984-8W
Chris Grayling

To ask the Secretary of State for Transport when the rights of commercial lenders to exercise repayment rights by the SRA, will be determined; and what guidance he has given to Network Rail about these rights. [67173]

Mr. Jamieson

The rights of the commercial lenders are determined through commercially confidential loan agreements as and when they are entered into by the lenders and Network Rail. Details of the SRA standby support facilities are set out in commercial agreements between the SRA and Network Rail. It is not for the Secretary of State to give guidance to Network Rail on these matters.

Chris Grayling

To ask the Secretary of State for Transport if the Government have sought state aid clearance for the sums paid to Network Rail in order to establish the company and meet its initial costs prior to the completion of the takeover of the assets of Railtrack plc. [67162]

Mr. Jamieson

No sums have been paid by Government to Network Rail Ltd. Individuals and advisers are engaged by Government to secure that a bid for Railtrack plc by a company limited by guarantee is taken through to completion. This does not constitute a state aid.

Chris Grayling

To ask the Secretary of State for Transport if he will list the estimates of the total revenues for Network Rail for each of the next five years that he used in assessing the viability of the proposal to securitise revenues described in paragraph 12 of the Minute to Parliament. [67169]

Mr. Jamieson

Network Rail's revenues will continue to receive the revenues determined by the regulator's October 2000 Periodic Review and the April 2001 agreement between Railtrack and Government, reflecting the amendments noted in the regulator's statement of 27 June 2002.

Chris Grayling

To ask the Secretary of State for Transport if he proposes to amend the Financial Framework of the Strategic Rail Authority as provided for in paragraph 16 of Schedule 14 of the Transport Act 2000 following the issuing of the Minutes to Parliament and the House. [67063]

Mr. Jamieson

The Financial Framework is reviewed regularly and may also be amended or augmented between reviews.

Mrs. May

To ask the Secretary of State for Transport when he applied to the European Commission for state aid approval for the(a) £300 million capital grant to Network Rail. Holdco Limited, (b) provision of £9 billion guarantee to Network Rail by the SRA, (c) provision of £10 billion of contingent funding for Network Rail, and (d) CTRL project. [66639]

Mr. Jamieson

[holding answer 3 July 2002]: The financial support package which the Government has agreed to make available to Network Rail if it completes the acquisition of Railtrack plc was notified to the European Commission on 31 May 2002. That notification covered all of the elements of the funding set out in the two Minutes which my right hon. Friend the Secretary of State laid before the House on 27 June 2002, and also the associated acquisitions of Railtrack Group's interests in the Channel Tunnel Rail Link.

Chris Grayling

To ask the Secretary of State for Transport in what circumstances commercial lenders will have the right to exercise the option described in note 2 on page 5 of the Network Rail Minute to Parliament. [67170]

Mr. Jamieson

Commercial lenders of the bridge facilities have the right to require the SRA to purchase all amounts due to them from Network Rail Group in the event of the SRA defaulting on any obligation to make the standby loans available to Network Rail.

Chris Grayling

To ask the Secretary of State for Transport if he will list the future income streams that will be securitised, as described in paragraph 12 of the Minute to Parliament. [67167]

Mr. Jamieson

This is a matter for Network Rail.

Chris Grayling

To ask the Secretary of State for Transport what total amount of state aid approval sought by the Government are for(a) financial and (b) other support to Network Rail. [67084]

Mr. Jamieson

The details of the notification made to the European Commission in respect of the support which the Government has agreed to make available to Network Rail if it successfully completes the acquisition of Railtrack plc are confidential. However, the contingent liabilities which the Government would incur as a result of this support are set out in the two Minutes which were laid before the House by my right hon. Friend the Secretary of State on 27 June 2002. These contingent liabilities are covered by the notification to the European Commission.

Chris Grayling

To ask the Secretary of State for Transport if Network Rail will be required to repay the loan facilities to finance legacy costs on 30 September 2004. [67055]

Mr. Jamieson

The repayment schedule for commercial loans to finance legacy costs will be determined through commercial loan agreements as and when they are required.

Chris Grayling

To ask the Secretary of State for Transport what proportion of Network Rail's future revenues he estimates will be securitised, as described in paragraph 12 of the Minute to Parliament. [67168]

Mr. Jamieson

This is a matter for Network Rail.

Chris Grayling

To ask the Secretary of State for Transport if he will make a statement on the other sums referred to in line 7 of paragraph 13 of the Network Rail Minute to Parliament. [67172]

Mr. Jamieson

"Other sums" refers to additional amounts that may be payable that are customary in facilities of this type, such as break costs. Break costs are costs which may be incurred if (i) the loan is prepaid (ii) an interest period is shortened by virtue of the prepayment and (iii) lenders are adversely affected. It is not possible to quantify these amounts in advance as they would depend on circumstances at the time, for example the level of interest rates.

Chris Grayling

To ask the Secretary of State for Transport what the total value is of the tax indemnity outlined in paragraphs 24 and 25 of the Network Rail Minute to the House. [67062]

Mr. Jamieson

Government has been advised that Railtrack Group should be able to take advantage of the exemptions referred to in paragraph 25 of the Minute. This would ensure that, in all likelihood, Railtrack Group incurs no tax liability as a result of the Railtrack plc disposal.

Miss McIntosh

To ask the Secretary of State for Transport if he will make a statement on the financing and funding of(a) RenewCo and (b) Network Rail for the purposes of what constitutes public expenditure under the assessment used by the Office for National Statistics. [67723]

Mr. Jamieson

The Office for National Statistics takes independent decisions in matters concerning the classification, preparation and publication of statistics. ONS decisions are consistent with the principles of the international statistical manuals, European System of Accounts 1995 (ESA95) and the system of National Accounts 1993 (SNA93) and supporting manuals and case law.

On 5 October 2001 the Department was informed that the ONS had determined that Railtrack's scheme for a new special purpose vehicle—RenewCo— would be classified in the public sector, if set up as proposed. On 27 June 2002 the ONS announced that Network Rail would be classified as a private sector corporation once its board has been ratified by its membership and on 5 July, it announced that Network Rail's borrowing will be classified as private sector borrowing in the national accounts.

Chris Grayling

To ask the Secretary of State for Transport what role his Department will play in selecting a representativse of the Strategic Rail Authority to sit on the board of Network Rail. [67164]

Mr. Jamieson

The Strategic Rail Authority will decide whom to select.

Chris Grayling

To ask the Secretary of State for Transport if the Government would allow the SRA to exceed the borrowing limit outlined in paragraph eight, sub-paragraph six of Schedule 14 of the Transport Act 2000 in order to meet its liabilities as outlined in paragraph 21 of the Network Rail Minute to the House. [67061]

Mr. Jamieson

The provision of any funds necessary to meet the SRA's financial obligations would be made by way of grant under paragraph 7 of schedule 14 of the Transport Act 2000 or by permitting the SRA to borrow in accordance with paragraph 8 of that schedule. Whether, and the extent to which, the SRA would be allowed to borrow would be determined at the time. The SRA's borrowing could not exceed £3 billion without this limit being extended by statutory instrument, a draft of which had been approved by the House of Commons.

Chris Grayling

To ask the Secretary of State for Transport what commitments the SRA has made for the future grant scheme to Network Rail, as described in paragraph 14 of the Minute to Parliament; and for what amounts. [67171]

Mr. Jamieson

The SRA have committed to provide Network Rail with grants to remunerate legacy costs incurred in the period 1 April 2001 to 30 September 2004, up to a cap of £5 billion, to the extent they are not recognised in an interim review. The regulator set out his proposed approach to an interim review in his statement of 27 June.

Chris Grayling

To ask the Secretary of State for Transport if the Government have made a financial provision for the potential additional costs arising from an increased settlement to Network Rail resulting from an interim review by the Rail Regulator. [67165]

Mr. Jamieson

While the legacy of Railtrack and its cost overruns creates potential additional costs, the Government expects Network Rail to operate more efficiently than Railtrack with lower financing costs and are-investment of operating surpluses back into the network. We cannot anticipate the outcome of the proposed interim review that would take all of these factors into account.

Mrs. May

To ask the Secretary of State for Transport if he will list outputs to be specified by Railtrack's successor, as negotiated by the SRA, in exchange for the provision of the funding package to Railtrack's successor. [68390]

Mr. Jamieson

[holding answer 9 July 2002]: I refer the hon. Member to paragraph 18 of the Regulator's statement of 27 June.

The SRA and Network Rail have entered into various agreements in relation to the financial support and output and enhancement obligations, all operating alongside the existing regulatory arrangements. In particular. the outputs will be developed further through Network Rail's business planning process.

Mrs. May

To ask the Secretary of State for Transport if he will publish the guidance issued to the SRA by the Office for National Statistics in relation to the structure of the funding package for Network Rail. [68389]

Mr. Jamieson

/holding answer 9 July 2002]: No guidance was issued to the Strategic Rail Authority by the Office for National Statistics.