Abellio ScotRail's £10m loan as it records £3.5m loss

Abellio ScotRail made a loss of £3.5m in its first full year operating train services in Scotland.

New accounts also show that it was loaned £10m by a Dutch sister company last year.

In its first nine months as ScotRail franchise operator in 2015, the subsidiary of state-owned Dutch Railways made profits of almost £10m.

Tough trading conditions and a partial closure of Glasgow Queen Street station have been blamed for the loss in 2016.

Abellio took over the ScotRail franchise in April 2015 and made profits of £9.5m in the first nine months.

That led critics to accuse it of profiteering.

Since then, the company has faced challenges, with delays and cancelled trains linked to major work on railway lines.

For 2016, Abellio ran at a loss of more than £3m, with no dividend paid to its Dutch parent company.

Abellio ScotRail said its turnover had been affected by tough trading conditions and the impact of the partial closure of Glasgow Queen Street station for 20 weeks.

The company faced heavy criticism after the reliability and punctuality of trains fell below the standard required of the franchise, but said performance had now improved year-on-year for six periods in a row.

It highlighted investment of £475m in the railways, the introduction of a new fleet of Hitachi-built electric class 385 trains and the "extensive" refurbishment of high-speed trains to serve Scotland's cities from 2018.

A spokesman for Abellio ScotRail said: "We're investing nearly half a billion pounds building the best railway Scotland has ever had, as part of our delivery of a highly-specified Scottish government contract.

"In doing so, we will deliver more seats and faster journey times for passengers, significantly improving customer service standards.

"We are making good progress with the recent independent National Rail Passenger Survey revealing that nine out of 10 customers are satisfied with ScotRail - equalling our best ever score."

He said ScotRail was the "best-performing large operator in the UK".

"However, it is not surprising that the challenges of last year have had a negative impact on our financial performance and we are disappointed to be recording a loss," he added

"As with previous years, and despite reports to the contrary, there will be no dividend paid to our parent company in the Netherlands."

Company accounts can make for dull reading - but this year Abellio ScotRail's accounts are a bit of a page-turner.

They point to a drastic change in fortunes in just a year - and show how operating the ScotRail franchise can be a high-wire act, with no safety net.

The bottom line tells part of the story. Abellio ScotRail made a loss for 2016 of £3.5m. Compare that with its first nine months as ScotRail franchise operator, when it profited to the tune of £9.5m.

But for ScotRail Abellio, it gets worse. The company took a £10m loan from its sister company, Abellio Transport Holdings BV. And the accounts say there'll be no dividend paid to their parent company in the Netherlands, Dutch Railways - NV Nederlandse Spoorwegen.

It's a family affair, but it all points in one direction - ScotRail Abellio needed urgent help to get it out of financial bother.

So, on the face of it, these numbers make grim reading for the Abellio group.

But there may be relief that they haven't made a profit. Imagine the political furore if that had happened.

Remember, this set of accounts covers a year where ScotRail passengers felt the pain. Performance and punctuality on ScotRail services dropped into the red zone - below the limits set out in the franchise agreement.

This was partly due to major work on routes through the central belt, and Queen Street station in Glasgow being closed for 20 weeks.

However, the Scottish government was on Abellio's case - warning it might be stripped of the ScotRail franchise if it didn't shape up.

Since then, ScotRail's performance and punctuality has bounced back, to a point where the company boasts it's the "best performing large operator in the UK".

But the ScotRail franchise remains a political punchbag, and the Scottish government says public sector bodies will be allowed to bid to run Scotland's railway services next time the franchises are up for renewal.

So Abellio ScotRail's financial loss will take some of the political heat out of the debate - for now.

But its record on performance and punctuality will remain under the microscope.