RAIL travellers could be paying 7% less for their fares if ScotRail had not paid out millions in dividends to shareholders, MSPs have been told.

The National Union of Rail, Maritime and Transport Workers (RMT) said franchise holder ScotRail paid dividends of £18 million in 2010, £18m in 2009, £17m in 2008 and £21m in 2007.

In a submission to Holyrood's Infrastructure Committee, which is taking evidence on the future of the rail franchise from 2014, the RMT said: "In two of these years, ScotRail actually paid more in dividends than it made in profit, leading to the obvious conclusion that because it does not contribute anything towards investment in the railway or rail infrastructure, and with the level of Government subsidy even covering its track access charges, it is simply milking Scotland's railway."

The union said the Scottish Government's proposals in the Rail 2014 consultation allowed for "the intensification of this theft".

It added: "If dividends were not paid in 2010, RMT estimates rail fares could have been reduced by almost 7%, which would undoubtedly improve accessibility. This makes clear the case for public ownership of Scotland's railways."

An annual season ticket between Glasgow and Edinburgh, which covers peak travel times, currently costs £3380, so a reduction of 7% would save £236.

A ScotRail spokesman said no dividends had been paid in the early years of the franchise "to allow significant investments to be made".