In March a row erupted between the British and Welsh governments over who should fund the two projects. The Welsh government claimed the British government had agreed to fund both schemes, but the British government insisted that the cost of the Valley Lines electrification should be covered by the Welsh.

However under the deal which will be announced by British prime minister Mr David Cameron in Newport today, the British government will take over sponsorship and fund electrification of the Cardiff – Bridgend section of the Cardiff – Swansea line at a cost of £105m and contribute £125m towards the Valley Lines electrification. In return, the Welsh government will sponsor and deliver the Valley Lines project, and will be responsible for financing the remaining £170m.

Cameron will also announce today that the Welsh government will take over responsibility for tendering the new Wales and Borders franchise, which is due to start in 2018.

Electrification of the Valley Lines is expected to begin in 2019 and will cut journey times from Cardiff to Merthyr Tydfil from 1h 3min to 49 minutes. The Cardiff – Swansea electrification will be completed in 2018, enabling through operation of electric services between Swansea and London Paddington. Electrification of the London – Cardiff line is already underway and due to be completed in 2017.