In common with DfT, in calling for 'more transparency' in rolling stock rentals the McNulty report appears to ignore the fact that the ROSCOs are commercial businesses. They have all been bought and sold since privatisation, and the 'big three' including Angel (RB1389 pB) have recently completed refunding exercises on the basis of future cash flows from lease rentals. New funders continue to enter the market. At issue are the rentals for the ex-British Rail legacy fleets where there is a tendency at DfT to assume that these have been fully written down and thus have no value. In practice, most legacy fleets are expected to earn a return up to and beyond their nominal book lives. Substantial investment in life-extension and upgrades has been made on this basis. A current example is the 1C125 fleet where nearly £100m has been invested in extending service life, recouped by the owning ROSCOs through lease rentals.
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