§ The Minister of State, Department for Transport (Dr. Kim Howells)I have today written to the Chairman of Central Railway declining the company's request for the Government to promote a Hybrid Bill to seek powers68WS for Central Railway's proposal to build a wholly privately financed dedicated rail freight line from North-West England to the Channel Tunnel.
The Government have carefully considered Central's proposals and has held extensive and constructive discussions with the company. While such a scheme could make a contribution to increasing the carriage of freight by rail, Central Railway has not substantiated the likely financeability of the proposals. The Government also have concerns about the operational effects on the existing rail network and on the capacity of the construction and financial markets, and the mitigation of the adverse environmental impacts.
The promoters have received expressions of interest from a number of possible debt providers but these are generally substantially caveated. Neither have they demonstrated that the significant amount of equity finance would be forthcoming.
Central Railway has claimed that no call would be made on the public purse. However, once the Government have agreed to promote a Bill, inescapably they would be taken to be backing the project. Should initial finance not be raised, or the project run into financial difficulty once work was under way, the Government of the day could not escape intense pressure to intervene. The Government have therefore concluded that it cannot promote a Bill against such risks.
The Government are supporting investment in enhancing the rail network, including capacity for rail freight, through other projects. In particular, the west coast main line upgrade and the channel tunnel rail link, together costing over £12 billion, will provide substantial extra capacity, including for freight.