East Coast Railway Line

Department for Transport written question – answered on 8th December 2014.

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Photo of Ian Lavery Ian Lavery Labour, Wansbeck

To ask the Secretary of State for Transport, with reference to his Written Statement of 27 November 2014, Official Report, column 49-50WS on Rail Franchising, what the reasons are for the difference between his Department's estimate of £3.3 billion for the premium the new East Coast Main Line franchisee will repay over the next eight years and the estimate of £2.3 billion premium payments over the same period in Stagecoach's press release of the same day.

Photo of Claire Perry Claire Perry Parliamentary Under-Secretary (Department for Transport)

The numbers published by the Secretary of State and by Stagecoach are consistent but are expressed in different terms.

The £3.3bn referenced in the Written Ministerial Statement and the Department for Transport’s press release is the total franchise premium in expressed in nominal terms. The £2.35bn total franchise premium referenced by Stagecoach’s press notice is the total franchise premium expressed in Net Present Value (NPV) (premium payments in real terms discounted at 3.5%).

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