A £100 million loan agreement by the European Investment Bank (EIB) will ensure the Borders Railway project can secure the best value finance, said Transport Minister Keith Brown today.
The Minister confirmed the project had met the eligibility criteria for a loan from the EIB, which finances projects that are assessed to successfully contribute to the balanced development of the European Union. The EIB will now offer the loan to the successful bidder at a rate competitive with private finance.
Simon Brooks, European Investment Bank Vice President responsible for the United Kingdom said:
“Borders Railway is an ambitious and exciting project that has potential to transform transport links and economic opportunities in Scotland. We congratulate Transport Scotland in successfully completing this stage of approval and look forward to finalising negotiations for the project.”
Mr Brown said:
“The Borders Railway is a key transport project in the south of Scotland, not only improving transport links but also generating economic and social benefits, and this award demonstrates the EIB’s confidence in its worth.
“This loan agreement with the EIB is further acknowledgement that the re-established railway will act as a catalyst for economic growth and inward investment in Midlothian and the Scottish Borders.
“Transport Scotland approached EIB in an effort to maximise value for money and this agreement will secure savings for the public purse by enabling the successful bidder to secure more economical finance, reducing the overall cost of the project.
“By bringing rail services back to the Scottish Borders over 40 years after it closed, we are demonstrating this Scottish Government’s commitment to South Scotland and the Borders Railway, as well as delivering sustainable economic growth.“
Representatives of the EIB visited the project last October to conduct a formal appraisal to ensure eligibility for financing.Borders Railway will re-establish passenger railway services for the first time since 1969 from Edinburgh through Midlothian to Tweedbank in the Scottish Borders. The railway will deliver major economic and social development opportunities and offer a fast and efficient railway that will be a real alternative to the congested road network. The project is a key part of the Scottish Government’s wider programme of investment in transport infrastructure working towards the sustainable economic growth of Scotland.
Borders Railway is expected to be running passenger services in 2014.
Notes to News Editors:
1) A capped financial contribution of £30m will be provided by the local authority partners – Scottish Borders, Midlothian and City of Edinburgh Councils. The successful bidder will be required to provide private financing proposals as part of their tenders.
2) The procurement process is underway with two bidders – IMCD (Sir Robert McAlpine Ltd, Iridium Concesiones de Infraestructuras SA and Carillion Construction Ltd) and BAM (BAM UK Ltd) currently participating in Competitive Dialogue. A preferred bidder announcement will be made in winter 2011.
3) Transport Scotland is the Scottish Government’s national transport agency responsible for; aviation, bus, freight and taxi policy; coordinating the National Transport Strategy for Scotland; ferries, ports and harbours; impartial travel services; liaising with regional transport partnerships, including monitoring of funding; local roads policy; major public transport projects; national concessionary travel schemes; rail and trunk road networks; sustainable transport, road safety and accessibility; the Blue Badge Scheme. Transport Scotland is an Executive agency accountable to Scottish Ministers.