Welsh railways are set to receive a £445 million investment when the Chancellor announces her spending plans for the coming years on Wednesday.
Rachel Reeves is expected to announce the additional funding as part of her spending review, aiming to address what the Treasury sees as years of underinvestment in Welsh infrastructure.
Understood to be a combination of direct funding and additional money for the Welsh government, the investment is expected to be spent on projects such as fixing level crossings, building new stations and upgrading railway lines.
A Treasury source said: “With this Government, Wales will thrive, and the Chancellor has prioritised bringing forward a package that has the potential to be truly transformative.”
On Tuesday, Welsh First Minister Eluned Morgan told members of the Senedd that her government was “expecting something positive from the spending review”.
She said: “I’ve been clear and I’ve been consistent when it comes to rail funding that we have not been getting our fair share of funding, in a position that the Tories left us with for over a decade.
“The difference between the Tories and the UK Labour Government is that they’ve recognised that injustice.”
Baroness Morgan’s comments came in response to criticism from Plaid Cymru leader Rhun ap Iorwerth of a decision to classify the £6.6 billion Oxford-to-Cambridge line as an England and Wales project.
The designation means Wales will not receive the additional rail funding it would get if branded an England-only project.
Mr ap Iorwerth said Wales had been “getting our share until Labour actively moved the goalposts”.
The expected announcement of additional funding for Welsh railways is one of several transport-related investments set to be confirmed on Wednesday.
Ms Reeves has already announced plans to spend a total of £15.6 billion on public transport projects in England’s city regions, and is understood to be preparing to extend the £3 cap on bus fares in England until March 2027.
