Of course not. That debt will be left behind for the taxpayer to pay off. But let's not forget that it was accumulated by the privatised railway and not the nationalised railway.
I know that I wont persuade you that things are not as black and white as you represent them, but I should like to make one or two points about debt incurred by the railways for the benefit of our younger, and possibly not so young, readers.
BR - a nationalised industry - did accumulate debt, by 1960 it had reached £500 million, the equivalent of over £10 billion today. The annual rate of increase was around £100 million, about £2 billion now. Much of the accumulated debt was either written-off or transferred to the Treasury by the 1962 Transport Act.
BRs financial position continued to slide and debt built up again. The 1974 Railways Act wrote-off £189 million of the £439 million (just over £4 billion now) of debt accumulated since the 1968 write-down and delayed repayment of the capital debt by 5 years.
Now to jump forward by a quarter of a century! Railtrack was funded entirely by the access payments made by the passenger and freight operating companies. Without rehearsing the events that led up to Railtracks administration in 2001, it was clear that Railtracks funding was not sufficient. When Network Rail was set up, its initial position was that it could continue with funding equivalent to Railtracks. However after the initial dust had settled it became clear that more money was needed, so Network Rail applied to the Rail Regulator for an interim review in 2003.
The Transport Secretary did not permit the Strategic Rail Authority to make it clear to the Rail Regulator during this review what it wanted Network Rail to deliver for the new Control Period. The Rail Regulator therefore assumed same again and increased Network Rails income accordingly. The Treasury had to pay up.
This had two consequences. The first was the enactment of the Railways Act 2005 in which the Government makes its requirements known through the High Level Output Specification (HLOS) and stated the money it was willing to spend over the next five years - the Statement of Funds Available (SoFA). The other was that the DfT was unwilling - the reasons for which I am not aware - to change the franchise agreements with the TOCs and increase the subsidy/reduce the premia so the TOCs would be indemnified for the higher track access charges but made the payments to Network Rail directly as a grant.
Debt, of itself, is not necessarily a bad thing. Companies raise money to operate and invest in plant and equipment from a variety of sources, one of which is by borrowing from banks or other financial institutions. Debt only becomes a bad thing if the company does not earn enough to service the debt.
In common with many other regulated network service providers, Network Rail finances investment using its regulated asset base (RAB). In general terms, the RAB is a financial construct which reflects the value of the assets that Network Rail uses to provide infrastructure services. The regulatory regime provides assurance that Network Rail will be allowed to recover the costs of these assets through access charges. The statutory duties of the Regulator, and its independence from government, mean that investors can rely on this assurance, and are therefore prepared to finance investment in these assets at a cost that reflects the lower level of risk, and over a long period, thereby allowing the costs of the assets to be recovered over a period that better reflects their lifespan. Network Rail started with £15 billion of debt inherited from Railtrack which included, via the privatisation process, a proportion (about £500 million) of the debt built up again by BR in its final years. Over the last 13 years or so as a result of expenditure on the infrastructure the debt has grown to more than £30 billion.
As most people are aware, there has been considerable controversy over whether Network Rail is a public-sector or a private-sector body. Although officially a private sector organisation, the fact that its debts were underwritten by the government, and now count towards the Public Sector Debt means that it is a nationalised industry in all but name.
So, not such a clear difference between privatised and nationalised debt as you make out.
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