‘Rail line to Swansea can still be electrified’
Electrification of the Great Western Mainline to Swansea, despite being scrapped by the UK Government last week, can still happen if a pragmatic longterm financing deal is struck, believes leading economist Gerry Holtham.
While saying that the UK Government should have funded electrification beyond Cardiff to Swansea, Mr Holtham said that Theresa May’s Government should allow the Welsh Government to issue hundreds of millions of pounds’ worth of “railway bonds” to finance the project – with the low-interestbearing bonds being paid back over a 30-year period.
The cost of electrifying around 60 miles of track between the two cities has increased significantly since electrification from London to Swansea was first promised by the then government of David Cameron in 2012.
The latest estimate is north of £500m, but if a big contingency (overspend) in that figure is not realised – and even better if the UK Government waived 20% VAT – it could come in far less than that.
And Aberdare-born Mr Holtham said if the project does overrun, any shortfall could be made up from the City Deals for the Swansea Bay and Cardiff Capital Region city regions.
Mr Holtham said: “Predictably, there have been cries of foul and complaints from Wales. Sadly, however, no-one has come up with a positive suggestion. So here is one.
“Firstly, if the UK Government has any shame or conscience at all, they should be mightily embarrassed at breaking their promise.
“They have tried to cover the retreat by saying they will supply bimodal trains that can run on diesel between Cardiff and Swansea, but that is patent rubbish. The trains will be heavier than pure electric ones and slower to accelerate.
“They will not reduce travel times between London and Cardiff as much as pure electric trains would. So Cardiff as well as Swansea will suffer.
“The Welsh Government has therefore got an excellent case for going to Her Majesty’s Government (HMG) and demanding the right to issue several hundred million pounds’ worth of railway bonds to finance electrification to Swansea.
“With an HMG guarantee, such bonds would carry an interest rate no higher than the inflation rate. In effect, they are interestfree. Paying back, say, £300m over 30 years would cost £10m a year, chicken feed in an annual Welsh budget of £15bn.”
He added: “Contributions from the city regions and a railway bond would finance the extension and give Network Rail no reason not to complete it.
“Some will complain that this is not fair. Central government should pay since the rail network is not a devolved responsibility.
“Yes, yes. But we are where we are.
“Sometimes Wales has to stop moaning that we are not well-treated and get on and sort things out for ourselves.”
Ken Skates, the Welsh Government cabinet secretary with responsibilty for transport, has written to UK Transport Secretary Chris Grayling, describing the decision as “extremely disappointing” as well as wanting clarification on a UK commitment to fund the line – which will also be used on Metro services – between Cardiff to Bridgend at a cost of £105m.
In his letter to Mr Grayling, Mr Skates adds: “This is damaging to our economy and to our communities and either urgent investment is needed to correct this historical underinvestment and the £700m shortfall, or the long-awaited proposals to devolve powers to Welsh ministers over rail infrastructure should be progressed with immediate effect, alongside a fair and proportionate funding settlement.
“I would welcome a commitment from you to ensure the estimated £700m funding that would have been provided to deliver electrification to Swansea is instead ring-fenced for projects in Wales.
“This must be in addition to a fair proportion of funding allocated to Wales for other rail enhancements in the future.”