S3M-1549 Borders Railway [Opening Speech]

Scottish Parliament

Thursday 13 March 2008

[THE PRESIDING OFFICER opened the meeting at 09:15]

Borders Railway

The Presiding Officer (Alex Fergusson): Good morning. The first item of business this morning is a debate on motion S3M-1549, in the name of Jeremy Purvis, on transport.

09:15
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09:23

The Minister for Transport, Infrastructure and Climate Change (Stewart Stevenson):





Thank you, Presiding Officer, for the opportunity to remind the previous Administration that it had eight years to decide what to do with the project. We are reiterating this Government's commitment to deliver the railway.

The leader of the Scottish Borders Council has welcomed my positive announcement and is delighted that the council has had confirmation that the project's construction will begin in this session of the Scottish Parliament.

Jeremy Purvis: Just for the record, during the passage of the bill through Parliament, did the minister vote to sack the Waverley railway partnership as promoter?

Stewart Stevenson: Mr Purvis is unable to recognise that we have an effective partnership with all the councils involved. I very much congratulate the Waverley railway partnership on its very valuable contribution to getting us where we are. We do, of course, have to move on to deliver. I am delighted that the relationship between the members of the Waverley railway partnership and this Government are so good and will be effective in ensuring that the project is delivered—on time and on budget.

Much has been made of finance. As I advised last week, we intend to deliver the scheme using a non-profit distributing model. That means that we will use expertise and innovation in the private sector to deliver this public infrastructure project. The NPD route will provide an opportunity to use a competitive process that is geared towards obtaining the best solutions from the construction and finance markets, while ensuring that any excessive profits will be reinvested for the good of the community.

Contrary to the views of certain members, NPD is not new. Three projects in Scotland have been developed using the NPD model already. Those projects are in the schools sector in the areas of Argyll and Bute Council, Aberdeen City Council and Falkirk Council. All three projects have reached financial close.

Elaine Murray (Dumfries) (Lab): Does the minister agree that the NPD model is a form of public-private partnership?

Stewart Stevenson: The model is a method of ensuring that we do not pay the excess interest rates that too many projects with which Dr Murray's party has been associated have paid. The NPD model is a way of ensuring that the profits that are derived from financing the project are delivered for public benefit. I would have thought that Labour members would welcome that approach.

A project for NHS Tayside is currently being procured using an NPD model contract. Furthermore, Network Rail—which is owned by the Government on our behalf—is, in effect, an NPD structure delivering at UK level across the rail infrastructure. In short, NPD is a tried and tested approach that was used for years by the previous Administration, starting in 2005.

As I announced in my statement to Parliament last week, the capital costs are indicated to be in the range of £235 million to £295 million, with a contribution of £30 million from the councils—those are 2012 figures. The councils welcome the stability in relation to their funding contribution. We anticipate that the money will be paid back over 30 years. The final timescale will be agreed with the successful bidder.

Jeremy Purvis: Can the minister clarify how much of the capital costs he intends to borrow? Last week, on "Scotland at Ten", Derek Bateman said to Christine Grahame that Borderers will want to know where the money is coming from. Christine Grahame replied that the amount that the Government has said it will commit to the scheme is the same as the previous Government said it would commit, and that the additional costs will be met by the NPD mechanism, spread over a number of years. Will the NPD mechanism be used to cover the additional costs or all of the costs?

Stewart Stevenson: The people of the Borders are not the slightest bit interested in where the money is coming from; they are interested in the money being spent to deliver a railway for their benefit. Our plans will ensure that the railway is built on time and on budget.

In the current testing financial times, investors will move to high-quality investments—a flight to quality, as it were. People are already expressing considerable interest in providing funding via this excellent investment opportunity. We welcome that interest whole-heartedly. It will ensure that the Scottish taxpayer gets good value for money.

I take this opportunity to reiterate our support for the project. The Government will have spent at least £40 million on the project before procurement commences, using the funding that I am talking about. There has been no cancellation of Government funding; in fact, we will be putting more money into the project. When one borrows money and repays money, one puts more money in.

When the railway opens, it will connect the Borders to the national rail network for the first time in more than 30 years and will reduce CO2 emissions by nearly half a million tonnes.

This Government takes a pragmatic approach to procuring projects because we are focused on project delivery.

I move amendment S3M-1549.1.1, to insert after "inception":

"commends the 450,000 tonnes of CO2 saved by the project".

09:29