John Redwood MP: Network rail needs to keep promisesBy Laura Herbert
October 08, 2012
This week I have learned that in the last year Network Rail had to write off £567 million from the value of all the derivatives and financial instruments it holds.
That’s a large sum, especially since we, the taxpayers, have to send Network Rail money to subsidise the railway.
Why, you might ask, is Network Rail running its own mini investment bank, when what we want it to do is to run a railway?
Why has it apparently lost such a large sum in just one year on its financial engineering?
Friends of Network Rail will probably tell us it is just the result of having to mark these instruments to market at an unfortunate time.
They will say that some of these financial instruments were bought because the company decided to take the extra risk of borrowing foreign currencies, and then bought various clever financial products to offset some of this.
That does not, however, change the fact that they had to report £567 million of losses on top of previous year losses.
It does not explain why a UK railway company with practically all its assets and revenues in sterling should want to borrow in foreign currencies in the first place.
I dwell on this because I am trying to get action on three counts to help our local transport.
I want to help the council’s plan for a bridge over the railway line to ease congestion.
I want safer level crossings.
And I would like Network Rail to honour its promise to build a new station.
I do not want Network Rail to threaten to close crossings we still need without supplying a safer alternative.
I did not ask them to throw out the coffee shop from the station.
I certainly did not want them to lose a bundle on financial instruments.
The last-year losses on these derivatives they have reported would buy Wokingham and places like it 100 bridges over the railway line.
Or it would buy several dozen new smaller stations.
It would go a long way to making the level crossings safer across the network.
I have been to see the Transport Secretary and I have had discussions with Department of Communities ministers.
I would like Network Rail to recognise it has not done a good job for Wokingham constituency in recent years.
I want it to accelerate its plans for safer crossings, and a new station.
I would like it to help get, not get in the way of, a new bridge.
I was pleased to hear they are going to clear the conduit that carries water across the railway at Luckley Wood, something we have been pressing for years.
I was less amused to learn from the borough council that Network Rail wants to charge the council a fee for suggesting a bridge over the railway line to try to tackle safety and congestion.
You could not make it up.
And they are meant to be a nationalised public service.