The nominal payment sees Island Line operator South West Trains take possession of the units. SWT owner Stagecoach has previously paid rolling stock leasing company HSBC Rail £150,000 a year to lease the carriages, much of which was reimbursed by the government, making the eight and a half mile route one of the most heavily subsidised rail lines in England and costing the taxpayer 77p for each mile travelled per passenger.

The Isle of Wight rolling stock arrangement was cited by the government in June 2006 when it prompted the Office of Rail Regulation to conduct an enquiry looking at whether or not ROSCOs were overcharging train operators to lease aged carriages that previously belonged to British Rail (Transport Briefing 28/06/06). In fact, the Class 483 rolling stock running on the Island Line originally entered service with London Underground in 1938. As a result, HSBC will be glad to have distanced itself from charging to use vintage trains in the event of future scrutiny of leasing costs.

South West Trains managing director, Stewart Palmer, said: "We are pleased to announce the change in ownership and a repaint for these trains. The Island Line is a vital form of transport both for local people and the booming tourist industry - and this marks another step in the direction of community rail partnership."

Peter Aldridge, head of HSBC Rail (UK), said: "This means the train company can adopt a more flexible, targeted approach to the local needs of the community, working alongside the Isle of Wight Community Rail Partnership, promoting increased usage by tourists and local people.

"HSBC Rail has worked closely with Island Line for the past 10 years to make modifications and repairs so that these units can continue to serve the Isle of Wight for many years to come. As part of the handover of these trains we have given a refund of rental towards the relivery and corrosion protection of the vehicles."

Jack Richards of the Isle of Wight Community Rail Partnership said he regarded the formal handover of the train fleet by the ROSCO as a welcome and logical development in the move towards increased local ownership of Island Line.

Island Line is served by six 2-car electric trains which run 68 services a day between Ryde Pier and Shanklin. Each unit is capable of covering up to 70,000 miles a year. The trains will now be repainted in heritage colours, as will stations at Ryde, Brading, Sandown, Lake and Shanklin.

On 29 November 2006 the ORR said it was "minded to refer the supply of leasing of rolling stock for franchised passenger services and related maintenance services to the Competition Commission for a market investigation under section 131 of the Enterprise Act 2002". It has since embarked on a further period of consultation with industry stakeholders.