Like any big project, I'm sure some of the money is going to well-connected people, and the route is partially influenced by politics. That's not the subsidy bi

Like any big project, I'm sure some of the money is going to well-connected people, and the route is partially influenced by politics. That's not the subsidy bit. The real subsidy is that once the line is complete, the rail franchise will be sold off, allowing a company to run a rail service on the line. This is in effect a subsidy, since it's letting a company run a rail service without having to foot the bill for the construction. Sure, it's a form of rent, but the risks associated with the line construction have been swallowed by government money. Plus, the UK government(s) have an absymal record for selling franchises below their 'true cost' (see the original rail privitisations, where franchises were bought and then sold-on shortly later at vastly inflated prices). Only an eternal optimist could happily assume they'll get it right this time! Finally, consider that these big rail projects are never initiated by private business. Few enterprises willingly stump up the cash to construct a big railway line just so it can run trains on it later. They only do so when government invests the cash. This surely implies that the government-backed schemes must be of benefit to the railway companies => there's the subsidy.