On track for disaster with Network Rail

FORGET the trumpet fanfare that attended the Coalition’s announcement last week of what was hailed as the biggest investment in the country’s rail infrastructure in 150 years. Instead, look at where the money is going.

According to the research of indefatigable Tory MP John Redwood, the owner of Britain’s track and stations, Network Rail, has been responsible for squandering huge sums of public money in recent years.

The former Cabinet minister has uncovered that in the financial year to March 2011, Network Rail reported a loss of £251million trading on the money markets. In the following year, another £93million similarly went down the drain.

These losses have been made in the so- called derivatives markets, where Network Rail takes risks by investing in foreign currencies as part of its long-term borrowing programme.

Redwood says: ‘At their last annual balance sheet date, there were total liabilities of £1.2billion in derivatives. It was as if Network Rail had been running its own investment bank.’

These findings suggest that hardpressed taxpayers’ money is going to an outfit that is operating in the fashion of an investment bank — as well as subsidising the losses on the country’s railway system.

Redwood says: ‘Surely someone could get a grip on this, and take Network Rail out of the derivatives business?’

He’s right. Wouldn’t you rather Network Rail (a public company that gave three of its directors £1million last year) improved the rolling stock or built a new bridge rather than gambling and losing money on exotic financial transactions?