To talk about Network Rail's debt is to miss the point in a rather unfortunate way. It's not a case of either keep NR public and the debt will get even more massive OR privatise it and the Treasury can breathe a sigh of relief.
The irony of NR's debt is that the reason it is so big is precisely because it used to be in the private sector, at least in name.
Under this arrangement, NR's accountants would agree a figure with ORR against which it could borrow, the so-called regulated asset base. The RAB was related to the value of NR's assets, so naturally, the more NR upgraded the railway through enhancements and reduced the overall age of railway assets, the higher the RAB and the amount it could borrow.
This mechanism existed precisely because NR was treated as being a private sector monopoly like a water company or regulated airport, and therefore in need of regulation as to how much it could borrow, invest and charge.
Now NR is public sector, the RAB has been done away with, and with it the ratchet mechanism that increased its debt. Highways England (formerly the Highways Agency) doesn't have a ton of debt, because it doesn't have NR's past, but it still spends billions a year on a transport network.
But I'm sure George Osborne will manage to persuade the rest of the cabinet of the false choice at the top of this post and get his £40 billion haircut as a result. When his successors at the Treasury realise that the cost of a privatised railway goes through the roof and the government still has to subsidise (more expensive) infrastructure upgrades and franchises just like they do now, AND is still ultimately on the hook for the whole show, well, they might have pause for thought.