'Unnecessary' row which could derail electrification

It's a dispute that one political leader calls 'an unnecessary row' that could risk the whole rail electrification project. It's certainly brought relations between the two governments to a new low. And nobody's entirely clear how or why it started.

The UK Government's plans to electrify not just the main line from London to Cardiff but also through to Swansea and the Valley Lines have been warmly welcomed by all parties since they were announced in 2012. The projects are seen as crucial to updating the rail links to and inside Wales and by so doing helping the economy here grow.

However on Monday, the First Minister, raised doubts about the funding of the project, saying that he had tried and failed to get assurances that the UK Government would keep to its side of the bargain, which he said was to fund the whole project including the Valley Lines. Here's some of what he said:

The UK Government hit straight back saying there was 'shock and concern' that the First Minister had chosen to start a row on this. Welsh Secretary David Jones said there had been an agreement between the then UK Transport Secretary Justine Greening and the then Welsh Communities Minister, Carl Sargeant, an agreement recorded in an exchange of letters between the two.

The 'deal' referred to is that the bill for repaying Network Rail's costs for electrifying the Valley Lines would go to the next company to run the Wales and Border Franchise. It would be up to the Welsh Government whether or not to give the Franchisee a bigger subsidy to help with that cost or allow it to be recouped through higher ticket prices. It seems the Welsh Government has decided it would prefer neither.

That may seem clear cut but the First Minister and Welsh Government sources say it's at odds with language used by the Prime Minister, Welsh Secretary and other UK Government officials claiming credit for delivering, and funding, the whole electrification project. I was pointed to this interview on the ITV Cymru Wales website from July 16 2012 as proof. A Welsh Government source highlights David Jones saying 'this is an extra £4.2 billion worth of funding that we are announcing today – a lot of it going to the South Wales Valley Lines.'

Meanwhile it's a furious Kirsty Williams who has called this an 'unnecessary row' that jeopardises the whole rail electrification project. It seems the Welsh Lib Dem leader was acting as a go-between to try to resolve the First Minister's concerns about the funding of electrifiying the Valley Lines and she believes had gained him enough assurances to allow the talking to continue to iron out further problems.

She says those assurances included a letter from the Prime Minster, an assurance that there was no question over the UK Government's full funding of the Great Western Main Line and an assurance from Network Rail that it would in no way 'down tools' on the project because of the dispute over Valley Lines funding.

Ms Williams now says 'it's a matter of regret to me that the First Minister has decided to have this row. Electrification is too important to have a row over it. It's not beneficial to the people of the Valleys. And it's not beneficial to the people of Wales.'