Valleys rail electrification bill row between governments

A major upgrade to the railways in south Wales has been thrown into doubt by a row between the Welsh and UK governments over who will pay for it.

First Minister Carwyn Jones claimed the UK government agreed it would fund the electrification of the London-Swansea main line and the Valleys lines.

But Welsh Secretary David Jones said that was not the agreed deal.

The UK government insisted ministers in Cardiff agreed to bear the cost of electrifying the Valleys lines.

The main line upgrade from London Paddington to Cardiff is due to be completed by 2017, and extended to Swansea by 2018 at a cost of £850m.

Electrification of the Valleys lines - the commuter lines in and out of Cardiff - is due to be completed between 2019 and 2024.

'Significant infrastructure'

BBC Wales has seen an exchange of letters between ministers on both sides setting out the terms of an agreement on electrification.

Welsh Secretary David Jones said he was "extraordinarily concerned" and "shocked" by the first minister's comments on Monday, given that his administration reached a "deal" in the summer of 2012.

He was speaking after Carwyn Jones called for clarity from the UK government.

The commitment to electrify the railway had been repeated publicly many times by David Cameron, the first minister said, but he added he was "becoming increasingly concerned about drift".

"We have made our position clear that we are willing to work with the UK government on this, but we do need to make sure that the commitments that have been given on many occasions in public by the prime minister are now adhered to," Carwyn Jones said.

He said the responsibility for upgrading the lines lay with the UK government.

"We have not committed to pay. After all this is an area that isn't devolved," he added.

In an interview with BBC Wales in October 2013, Mr Cameron said: "It's this government that's putting the money into the electrification of the railway line all the way up to Swansea and, of course, the Valley lines."

However the Wales Office office points to an exchange of letters between then UK Transport Secretary Justine Greening and then Welsh Transport Minister Carl Sargeant.

In her letter on July 13 2012, Ms Greening hails "a deal which will be perhaps the most significant infrastructure announcement for Wales for many years".

Electrified services in the Valleys will be included in the Wales and Borders franchise, it says. The two governments are joint signatories of the franchise.

Her letter said there would be "a specific access charge on the franchise to repay the infrastructure investment by Network Rail".

In his reply Mr Sargeant confirms "our agreement as set out in your letter".

'Very worrying'

Welsh Secretary David Jones told BBC Wales he was surprised at Carwyn Jones's comments.

"It's quite clear what the Welsh government was going to be doing through the Wales and Borders franchise and what HMG (Her Majesty's government) was doing," he said.

"I am absolutely amazed that he hasn't mentioned this correspondence. This evidences an agreement in the clearest possible terms.

"This was a deal, and a deal is a deal, and we expect them to adhere to the deal.

"That in my book is a contract. It couldn't possible be clearer.

"This is very, very worrying," David Jones added.

An outline business case for Valleys rail electrification - written by the Welsh government in 2012 - estimates the cost at between £309m and £463m.