Public and passengers pay 8% on Scotrail bailout loans

Public and passengers pay 8% on Scotrail bailout loans

14 November 2018

RMT Press Office:

Rail union RMT revealed today that Scotrail passengers and taxpayers could be subsiding bailout loans to the beleaguered company being charged to the tune of an eye-watering eight per cent.

Scotrail is owned is by Dutch State Rail, Nederlandse Spoorwegen (NS) and in an article in the Dutch Press reporting NS support for its subsidiaries, including Scotrail, the NS financial director Bert Groenenwegen says: “The additional payments consist of loans from the parent company to the subsidiary. 8% interest is paid on this and there is no reason to assume that the money cannot be repaid at the end of the concession".

This rate of return clearly outstrips the Rail Delivery Group’s claim of an average return of two per cent for Train Company investments.

The revelation comes on the day that the Scottish Parliament is due to vote on whether the Scottish government should enforce the ScotRail break clause to bring the current franchise to an end in 2022.

RMT general secretary Mick Cash said that the loan by Dutch State rail to its Scottish subsidiary will have to be paid back at an eight per cent rate, when instead the money could be used to improve services and cut fares.

“Once again it is the Scottish passengers and taxpayer who are paying the price of privatisation and that is why 25 years after the UK legislation that brought in the rail privatisation disaster the Scotland Parliament should today take a stand and vote to begin to bring this madness to an end in Scotland."


Notes for editors

The revelation by the NS finance director can be found at and is roughly translated below

“Dutch Railways are faced with substantial setbacks in the United Kingdom. On two of the three UK rail concessions, losses were incurred in the past financial year. That reports the FD.

For example, the NS had to assist by providing subsidiary services Abellio with an extra 54 million euros. In addition, the state-owned company is at odds with the British Ministry of Transport about a tight clause in one of the three concessions in Great Britain.
The problems are a line through the account for NS, which since this year has generated more sales from abroad than in the Netherlands. The company hardly earns on the operation of the Dutch main rail network and therefore wants to achieve its growth from abroad, including Germany and the United Kingdom.

Loss-making concessions

Two of the three rail concessions were loss-making for the NS last financial year. 2.5 million pound sterling was lost on Greater Anglia, which runs the rail link between London and South East England. Scotrail, which regulates Scottish train traffic, lost more than 15 million pounds. Whether the third line, which is loss-making from London to Birmingham, remains to be seen.

NS performance is also closely monitored in the United Kingdom. Local parties call the participation of foreign state-owned companies in contracts 'unfair competition', because they can offer more sharply. Opposition party Labour would prefer to keep the track entirely in British hands.

Politically not happy
Dutch politicians are not happy with the disappointing results of the NS. PvdA Member of Parliament Henk Nijboer, who has been against NS's foreign expansion for some time: "This is an additional sign that the NS has nothing to look for." Nijboer thinks it is 'not a task' for the taxpayer to buy NS shares has, to invest in foreign rail services. "Stop those foreign adventures, is his motto."

Financial director Bert Groenenwegen of the NS admits the setbacks, but nuances the risks. "The additional payments consist of loans from the parent company to the subsidiary. 8% interest is paid on this and there is no reason to assume that the money can not be repaid at the end of the concession. "

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Tagged with: scotrail, ns, snp, rail privatisation