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| £1bn funding row puts new rail franchise 'in jeopardy' | £1bn funding row puts new rail franchise 'in jeopardy' |
| (about 1 hour later) | |
| A £1bn funding row is set to delay the new rail franchise process in Wales - with the project "in jeopardy", according to the Welsh Government. | A £1bn funding row is set to delay the new rail franchise process in Wales - with the project "in jeopardy", according to the Welsh Government. |
| The four firms bidding to run the Wales and Borders network were due to submit tenders on 18 August. | The four firms bidding to run the Wales and Borders network were due to submit tenders on 18 August. |
| However, the UK Department for Transport (DfT) wants the date moved to 26 September to resolve a funding row. | However, the UK Department for Transport (DfT) wants the date moved to 26 September to resolve a funding row. |
| The Welsh Government wants £1bn plus £3.5m for delays it said were caused because of June's general election. | The Welsh Government wants £1bn plus £3.5m for delays it said were caused because of June's general election. |
| The bidders - Abellio, Arriva, KeolisAmey and MTR - have been in discussions since June 2016 over the running of the network, including the South Wales Metro project. | The bidders - Abellio, Arriva, KeolisAmey and MTR - have been in discussions since June 2016 over the running of the network, including the South Wales Metro project. |
| But UK Secretary of State for Transport Chris Grayling has threatened to put the whole process on hold. | But UK Secretary of State for Transport Chris Grayling has threatened to put the whole process on hold. |
| The £1bn requested by the Welsh Government relates to an annual rebate of £67m given by current franchise holder, Arriva Trains Wales, to the DfT. | The £1bn requested by the Welsh Government relates to an annual rebate of £67m given by current franchise holder, Arriva Trains Wales, to the DfT. |
| The rebate, which is linked to track charges, is passed to Network Rail via a grant for improving railways. | The rebate, which is linked to track charges, is passed to Network Rail via a grant for improving railways. |
| However, the rail infrastructure in Wales will remain in UK government hands after the handling of the franchise is devolved to Wales from 2018. | However, the rail infrastructure in Wales will remain in UK government hands after the handling of the franchise is devolved to Wales from 2018. |
| The Welsh Government says this means it will not be able to collect the rebate - which it has calculated to be worth £1bn over the 15-year span of the contract. | The Welsh Government says this means it will not be able to collect the rebate - which it has calculated to be worth £1bn over the 15-year span of the contract. |
| In a letter to Welsh Economy Secretary Ken Skates, Mr Grayling said he would only authorise the tender process continuing when agreement is reached on this. | In a letter to Welsh Economy Secretary Ken Skates, Mr Grayling said he would only authorise the tender process continuing when agreement is reached on this. |
| He described it as a "claim which would commit my department to finding an additional £1bn over the franchise term compared with today, and for which I see no basis". | He described it as a "claim which would commit my department to finding an additional £1bn over the franchise term compared with today, and for which I see no basis". |
| Mr Grayling also said he was "unable to accept" an assertion he attributed to Mr Skates that the "general election caused the process to be behind schedule". | Mr Grayling also said he was "unable to accept" an assertion he attributed to Mr Skates that the "general election caused the process to be behind schedule". |
| He listed seven outstanding issues, such as the Welsh Government not resolving the future of the valleys lines with Network Rail and services that cross into England. | He listed seven outstanding issues, such as the Welsh Government not resolving the future of the valleys lines with Network Rail and services that cross into England. |
| The secretary of state blamed "cumulative delays in the process over the last few months" and refused to pay the £3.5m in compensation requested. | The secretary of state blamed "cumulative delays in the process over the last few months" and refused to pay the £3.5m in compensation requested. |
| Saying the tender process will not begin until he is happy all issues were resolved, he added: "The scale of the challenge for all of us is clear." | Saying the tender process will not begin until he is happy all issues were resolved, he added: "The scale of the challenge for all of us is clear." |
| 'Major issue' | 'Major issue' |
| A Welsh Government spokesman said Mr Grayling's letter "misrepresents a complex devolution position". | A Welsh Government spokesman said Mr Grayling's letter "misrepresents a complex devolution position". |
| He added: "This approach jeopardises the Welsh Government's ability to award a replacement for the current Wales and Borders franchise, which, if unresolved, will be a major issue for rail users. | He added: "This approach jeopardises the Welsh Government's ability to award a replacement for the current Wales and Borders franchise, which, if unresolved, will be a major issue for rail users. |
| "Being willing to subject people to the prospect of continued overcrowding and poor quality rolling stock to resolve a budgetary issue of their own making is no way for the UK government to behave." | "Being willing to subject people to the prospect of continued overcrowding and poor quality rolling stock to resolve a budgetary issue of their own making is no way for the UK government to behave." |
| The spokesman accused the UK government of having a "cavalier attitude to devolution". | The spokesman accused the UK government of having a "cavalier attitude to devolution". |
| A Department for Transport spokeswoman said: "We remain committed to the principles agreed with the Welsh Government in 2014 to devolve rail powers." | A Department for Transport spokeswoman said: "We remain committed to the principles agreed with the Welsh Government in 2014 to devolve rail powers." |
| Russell George, the Conservative's economy and transport spokesman in the assembly, called the letter "damning". | |
| He added: "Sadly, it's the commuters which are going to pay the price and they will be extremely worried that the timeline for completing the next franchise seems some distance away." | He added: "Sadly, it's the commuters which are going to pay the price and they will be extremely worried that the timeline for completing the next franchise seems some distance away." |