Telegrammed by Bulldog Drummond
Interesting that two very similar stories (Alistair Osborne in Friday's Daily Telegraph and Tom Winsor in the Times today) suggest that the Government could trouser £12bn by selling off Network Rail.
This is based on the accounting wheeze that the Regulatory Asset Base is really 'worth' £36bn.
The figure is arrived at by deducting the debt of £23bn which supposedly leaves an equity of £12-13bn.
Complete fantasy of course as the RAB is not a realistic asset valuation in commercial terms and it conveniently overlooks the question as to who would want to invest in a business that has such huge debts, which can only be propped up by massive government subsidy and borrowing that, in part, goes to cover normal running costs and paying debt interest.
Network Rail is a complete dog's breakfast of a business and is only viable with huge levels of taxpayers' moolah.
The only people who can have any possible interest in selling off this business are the huge army of bankers, lawyers, consultants and general hangers on who are experiencing thin pickings at the moment.
It is certainly not in the interests of the taxpayer or those who want a properly run and cost-effective railway.
