Taxpayer could face £1bn ScotRail bill
Public purse now liable for losses during lockdown
TAXPAYERS could face an eye-watering £1billion bill for running train services during the coronavirus crisis.
Emergency changes to the ScotRail and Caledonian Sleeper franchises made by the Scottish Government mean it is responsible for all financial risk and profit during the pandemic.
Transport Secretary Michael Matheson estimated the total cost of the move is likely to be around £250million over six months.
But opponents say the final bill may reach around £1billion.
The changes – also introduced elsewhere in the UK with other franchises – aimed to prevent services being threatened by the collapse of an operator.
Demand for ScotRail services has slumped by up to 90 per cent as a result of the Scottish Government telling people to only leave the house for essential work, to get food or medicine, or for exercise.
During Holyrood’s connectivity committee yesterday, Mr Matheson said: ‘We’ve put in place an emergency arrangement within the franchise agreement for both the Caledonian Sleeper and also for the ScotRail franchise.
‘That’s been put in place for the next six months. It will be reviewed in September.
‘It’s the same arrangement that has been put in place for train operating companies all across the UK, given the big drop-off they saw in passenger numbers and the impact that has on revenue.
‘The estimated cost for six months across both franchises is in the region of £250million. The final cost in that particular variation to the contract is dependent on how long we have to extend the existing waiver within the contract.’
But Tory committee convener Edward Mountain said the emergency arrangements may need to be in place for ‘much longer’ than six months.
He said: ‘My concern would be, with social distancing on railway carriages meaning only eight to ten people, or maybe 15 people, on a railway carriage, it is never going to come back in the short term to any financial balance.
‘Therefore, I am just wondering how the Scottish Government is proposing to finance what possibly could be up to £1billion in costs for running the rail network while we have social distancing in place?’
Mr Matheson replied: ‘There is a potential for an extended period of time beyond the initial six months where we will have to continue with the existing arrangements, and we’ll have to look at what financial provisions we put in place to manage that.
‘Having said that, the difficulties which we are facing here in Scotland are no different to the very same challenges which are happening in other parts of the UK and the financial costs associated with this will apply in other parts of the UK.
‘Part of the dialogue we have had with the DfT (Department for Transport) and UK ministers is in looking at what the wider financial impact could be on the rail network with physical distancing.
‘Decisions will need to be made around any further financial support that is to be provided once we get to the point in looking to see whether we extend it beyond the September timetable we have in place at the present moment.’