THE Scottish Parliament took control of the rail network north of the border yesterday in the most significant extension of its powers since devolution in 1999.

It means that ministers at Holyrood, through a new transport agency, will have wide-ranging regulatory powers not only over the operators of the rail journey franchise in Scotland (First ScotRail) but also over the railway infrastructure such as tracks, signals, stations and depots operated by Network Rail.

Ministers will also be answerable to MSPs over how they exercise these powers and will have a budget of £325 million to fund the new arrangements. The powers over the network in Scotland have been transferred from the Department of Transport in Whitehall.

Ministers will manage the seven-year First ScotRail franchise and will also have responsibility for setting fares and funding railway improvements. They will also determine strategies and specify infrastructure needs.

Although the move represents something of a milestone in the short history of devolution, ministers opted yesterday to present it in a low-key way, with only a short press statement and a photo-opportunity featuring Tavish Scott, Scotland’s Transport Minister. That was surprising given that extending the powers of the Parliament in Edinburgh is certain to be a key issue in the run-up to the Holyrood elections in 2007, with the Scottish Nationalists, the Conservatives and the Liberal Democrats — Labour’s coalition partners in the Executive — campaigning for more powers to be devolved.

Labour sources are keen, however, that the issue is not played up and want instead to concentrate on the bread and butter issues, already devolved, of health, education and law and order in their pitch to Scottish voters. Labour strategists say that powers should not be extended for the sake of it but only where it is appropriate as in, they say, the case of the railways.

Mr Scott said yesterday that the new powers would enable key rail industry players to provide a modern, reliable service for Scotland. “Passengers want a train service which meets their needs and expectations — whether business or social,” he said.

The cash will allow much-trailed improvements at Edinburgh’s Waverley Station to move forward, as well as other projects such as rail links to both Edinburgh and Glasgow airports.

Under the new powers, the Executive has sole control of spending by Network Rail, which has responsibility for tracks and signals. Some functions, including safety and the licensing of railway operators, will remain reserved to UK ministers.

A First ScotRail spokeswoman said the transition would be smooth. “The direction will come from the Scottish Executive, but that has been happening with us already in Scotland. We’ve been in contact with them in relation to funding, what kind of level of service we are operating, what new trains we are opening and what is being delivered,” she said.

The shake-up has been given cross-party backing at Holyrood and has also been given a fair wind by Westminster, with Alistair Darling, the UK Transport Secretary and Secretary of State for Scotland, declaring that he wanted more decisions on the railways to be devolved to Scotland and Wales.

The new powers will also allow the Executive to designate new services or recommend the closure of any financially troubled lines.

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