BELEAGUERED Abellio ScotRail has seen its public handout soar to a record £482.8m.

Financial performance details show that the Dutch-owned firm that operates Scotland's railways saw its subsidy rise by nearly £200m in just over a year - mostly to cover an over £150m annual rise in the charges imposed to access the tracks.

But the company still posted record £11m in losses.

The details emerged less than a fortnight after it was announced it had been stripped of the franchise three years early in the wake of continuing outrage over service failings.

Transport Secretary Michael Matheson told MSPs his officials considered continuing the franchise to its full term but felt it would not deliver value for money. And he said there was no justification for a further rise in the subsidy, requested by Abellio.

The £11m pre-tax loss, covering a 15 month period to March 31, 2019, compares to a restated £4m deficit for the year to December, 2017.

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Subsidies from Transport Scotland soared by 63% from £296.6m in 2017 to £482.8m while passenger income boosted by fare rises rose by nearly £100m to £445.3m.


The latest subsidy covering a year and three months eclipses what Abellio ScotRail received in its first two years.

The company said that the increase in subsidy included "additional contractual contributions" which resulted in a doubling of access charges imposed by the rail infrastructure managers Network Rail as decided by the regulator, the Office of Rail and Road. They rose from £144.15m to £291.06m.

An Office of Road and Rail (ORR) report detailed a record £307m payment for the financial year 2017/18, a rise of 22%.

At the time ScotRail said the 22 per cent increase in franchise payments was built into the original contract because of Network Rail “fixed track access charges” which increase over time.

In November, last year, it emerged that ScotRail had been paid £23m early to cover revenue shortfalls and amid growing concerns over performance. The payments were made throughout 2017 and 2018 as pre-tax losses rose.

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It came after Abellio did not achieved an increase in ticket sales because of delays and disruption caused by upgrading of the main Edinburgh-Glasgow line.

When asked yesterday, the Scottish Government said the main difference relates mainly to track access charges that went to Network Rail. Track access charges were said to have increased, among other reasons, because there are more services than ever before.


A Transport Scotland spokesman said: “It has been stated several times previously these payments include the various increases for fixed track access charges which, in turn, are paid straight to Network Rail. This is something we have been open and transparent about.

“Our commitment to financing improvements for passengers with a raft of new services, trains and improvements has been shown time and again. Ministers continue to hold Abellio to account within the terms of the franchise agreement.”

Financial statements also reveal there are £40m in loans owed to sister companies of Abellio and the parent company in the Netherlands, Dutch Railways - NV Nederlandse Spoorwegen - a rise of nearly £15m on the previous year.

The Scottish operation owes Nederlandse Spoorwegen, the principal passenger railway operator in the Netherlands, some £21m from loans, up from £10m the previous year.

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Most of the loans will be payable at the end of the franchise in March, 2022, and are being charged at up to 8% annual interest.

And the cost of renting rolling stock soared from £78.86m to £127.79m.

The new financial results came off the back of introducing a new fleet of greener and faster trains to help create "the best railway Scotland has ever had".


Flashback to concerns raised on social media about the chaos that followed the introduction of the 2018 winter timetable.

In December, last year, the new timetable with the introduction of high speed trains and new class 385 electric trains ushered in months of cancellations and disruption to services with much of it put down to staff shortages partly because they had been undergoing training to deal with the new trains and timetable.

ScotRail was forced to submit a plan by February 19 to address falling performance levels which if unsuccessful could result in a breach of contract and lead to Dutch transport firm Abellio losing the ScotRail franchise early. A remedial plan to improve performance has been in place since February.

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In a report, the Abellio ScotRail board said: "During this unprecedented investment and change, results for the period have been impacted by operational performance issues following major infrastructure upgrades of track and stations and the late deliver of new trains to support significant timetable improvements.

"A performance improvement remedial plan was agreed with Transport Scotland in February 2019 that included additional investment of £18m in the company's operations and we have seen a significant improvement in performance with all targets set in the plan delivered to date."

It acknowledged that customers' satisfaction measured through the National Rail Passenger survey was at 84% in the spring of last year, and 79% in the autumn "reflecting the disruption to operational performance. But it said it was "pleased to note" an improvement to 85% in the spring of this year.

And the board added: "The company is completely focused on completing the job of delivering all of the ambitious plans set out for the franchise in Scotland, to give passengers the service they expect and deserve from their railway."

And the directors said it is "confident" that the introduction of new trains and new timetables together with journey time improvements will generate an improvement in the company's financial performance in the following years.

"Following review, and despite the loss in the period, the directors are satisfied that the company has sufficient resources available to meet its financial obligations as they fall due for a period of at least 12 months from the date of signing [July 29, 2019] and consider it appropriate to continue to adopt the going concern basis in preparing the financial statements," said the board.

On January, 2016, Abellio had made profits of £9.5m in the first nine months of the franchise which led critics to accuse it of profiteering. But the following year it reported a £3.5m loss in its first full year operating train services .

Abellio controversially took over from FirstGroup, after the Aberdeen-based company had run most Scottish rail services for some 10 years. The ten year deal was worth up to £6 billion in what was then the biggest single contract every awarded by the Scottish Government.

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The decision, hailed by then Scottish transport minister, Keith Brown as a "world leading contract to deliver for rail staff and passengers" triggered a political row, with unions and Labour condemning the award to an overseas company rather than the Scottish-based firm.

Network Rail said that operators pay access charges based on a range of factors including the number of trains they run and the type of trains. Diesel or electric trains attract different rates of payment.

It said that running more services can lead to charges increasing as too can running more electric train services as they require more maintenance than non-electric.

That is because Network Rail has to maintain the overhead lines and pay to keep them supplied with electricity.

A Network Rail spokesman said: “Track access charges are agreed in advance in conjunction with our regulator the ORR.

“Track access charges help to pay for the operation, maintenance and enhancement of our railway infrastructure and are based on the number of trains, and type of trains, each operator runs.

“All money raised through track access charges is reinvested in Scotland’s Railway.”

An Abellio spokesman said: “The subsidy to Abellio ScotRail includes an additional £150m for Network Rail charges and covers 15 months rather than 12. "