All three rolling stock companies, or ROSCOs, have parent companies in low-tax jurisdictions. In the realm of British rail transportation, a curious financial arrangement defines the landscape of locomotives hurtling across England, Scotland, and Wales. The vast majority of these trains, those that faithfully ferry passengers to their destinations, are not assets owned by the train operating companies (TOCs) that manage their daily journeys.
Instead, they belong to rolling stock companies (ROSCOs), entities that lease the engines and carriages to TOCs, all under government-issued franchises. An intriguing contrast emerges north of the Irish border, where in Northern Ireland, the state-owned NI Railways stands as the custodian of the rails.
Privatisation
This ROSCO-leasing framework, a hallmark of British rail privatisation, traces its roots to the Conservative government under Prime Minister John Major, who set in motion the privatisation of British Rail (BR) over three decades ago. In its implementation, BR underwent a dramatic three-way division: