> If it aint broke… break it.
The East Coast Main Line franchise made a profit of £13 million last year – with the cash returned to the Treasury.
And the financial success of the line is in stark contrast to other (privatised) rail franchises, which required millions in subsidies to keep going.
Labour said the figures exposed the foolishness of privatising the line, which is currently run by a state-owned business but is due to be managed by Virgin Trains from March.
They were published in the annual financial report of the Office of Rail Regulation, the official regulator for Britain’s railways.
The East Coast Main Line was one of only two rail franchises to make a profit for taxpayers. The other was South West Trains.
Virgin Trains, which currently runs the West Coast Main Line from London to Manchester and on to Scotland, received £221 million in subsidies.
And the most expensive franchise was the Northern Rail line, which operates in the North East, North West and Yorkshire, and received £495 million.
A separate study by consumer group Which also found the East Coast Main Line had a good record for train delays, coming sixth out of 21 franchises for the lowest number of delays.
Labour’s Shadow Rail Minister Lilian Greenwood MP said:
“These reports prove that the forthcoming East Coast sell-off is set to be a terrible blunder that puts privatisation ahead of passengers’ and taxpayers’ best interests.”
“East Coast was one of only two train operating companies that made a net contribution to the Treasury once infrastructure costs were taken in to account.”
Labour plans to allow a state-owned operator to bid for future franchises, although this would still potentially allow private operators to run franchises if they win the bidding process.
The policy not supported by some Labour MPs who argue that franchises should simply be transferred to the public sector once they expire.
Rail Minister Claire Perry said:
“We are investing record amounts in our railways as part of our long-term economic plan and passenger fares have a crucial role to play in funding these improvements, which will bring more services, more seats and modern trains.
“As we drive forward this huge investment programme, it is absolutely important that disruption to passengers is kept to a minimum. It is also important that we recognise passengers’ concerns about the cost of rail fares. This is why we have frozen them for the second year in a row.”
The Office of Rail Regulation said rail industry income from passengers in 2013/14 was £8.16 billion – a 10.8% rise compared with the figure for 2010/11 and 6.2% higher than in 2012/13.
Government funding for the railways in 2013/14 was just under £3.8 billion – a 16.4% dip on the total for 2010/11 and 8.1% down on 2012/13.
Total Government funding in 2013/14 varied from £1.88 per passenger journey in England to £7.77 per journey in Scotland and £9.18 per journey in Wales.
Government funding in 2013/14 represented 28.5% of the rail industry’s total income.
The number of passenger journeys increased by 16.6% (or by 260 million journeys) between 2010/11 and 2013/14, with the amount of freight carried rising 18.1%.
ORR chief executive Richard Price said:
“There has been substantial growth in the use of the railways in the past four years. Passengers are increasingly the main funder of the railways, and must be central to developing plans for future services and investment.
“Our report also highlights that the rail industry has been successful in keeping costs stable despite carrying significantly more passengers.”
Source – Newcastle Journal, 16 Feb 2015
> Bit of a suprise… everyone seemed to expect the French bid to win.
Virgin Trains and Stagecoach have won the franchise to run the East Coast mainline rail route, it emerged this morning.
The controversial takeover has seen the firms promise to invest £140m in the route over eight years, and will pay the government £3.3bn for the contract.
Rail Minister Claire Perry is expected to be at Newcastle Central Station today and the franchise, which covers the route between London and Edinburgh, has been publicly run since 2009.
The anticipated move was lambasted by Labour MPs in the North East, after the publicly-run Directed Operated Railways brought the line back into profit.
Ahead of this morning’s decision, Dave Anderson, Blaydon’s Labour MP, said:
“This shows the real contempt that this coalition feels for the people of the North.
“We have seen continuing failures by private companies in running our line over the period since privatisation until the public sector stepped back in and stopped the rot and we have seen increased punctuality accompanied by increased usage by the travelling public which has delivered the best economic performance of any UK train service.
“This counts for nothing in the world of Conservative dogma. It shows, yet again, that this Government will ignore the wishes of anyone as it steams ahead with its ideological attack on the public sector in our country.”
East Coast paid a record £235m back to the Government in its final full year in public hands – up 12% on the previous year. Proof, unions believe, that a private sector deal is politically-motivated.
Grahame Morris, Easington MP, dismissed the privatisation of the line this week as “right wing Tory dogma”.
He said: “This public-run rail franchise has generated over a billion pounds for the Treasury.
“If this is what a publicly-run train operating franchise can deliver, at a time when every penny counts, we should be looking at ways to bring privately run railways back into public ownership not the other way round.
“This is right wing Tory dogma being put ahead of the best interests of the service, consideration for passengers and the public finances.
“The public-run East Coast Main Line franchise has consistently been the best performing franchise when it comes to passenger and staff satisfaction, fares and profitability.”
Source – Newcastle Evening Chronicle, 27 Nov 2014
The shortlist of train firms bidding to run the region’s rail services have been announced by the Government – with unions immediately descriving the operators as the “same old greedy companies”.
Three companies have been shortlisted to run the Northern franchise, while three companies are being considered for the TransPennine Express franchise.
All the operators companies have successfully passed the pre-qualification stage, and will now be asked to develop their plans for the franchises before they receive the Government’s Invitation to Tender in December.
Officials say that bidders will be expected to show how they will make the most of the government’s £1billion investment programme for the rail network in the north of England, which aims to provide faster and more reliable journeys, more capacity, better trains and improved connections for passengers across the region.
The shortlisted bidders to run the two franchises are:
• Abellio Northern Ltd
• Arriva Rail North Limited
• Govia Northern Limited
• First Trans Pennine Express Limited
• Keolis Go-Ahead Limited
Rail Minister Claire Perry said: “The north is undergoing a real rail renaissance, and we will be asking these companies to come up with innovative and ambitious proposals that will ensure a truly world-class rail network for the region.
“Building a railway that is fit for the 21st century is a vital part of our long term economic plan, connecting businesses and communities, generating jobs and boosting growth, and we need strong private sector partners to help us achieve this ambition.”
The new operator will also be expected to work closely with Rail North, which represents the region’s local authorities, to ensure local rail users will have more influence in how their train services are run.
Sir Richard Leese, for Rail North, said: “The companies on the shortlists demonstrate the interest there is in meeting Rail North’s desire to see the railway acting as an economic driver in the north of England.
“We look forward to working with the bidders to deliver strong franchises for passengers, which reflect the aims and objectives of our Long Term Rail Strategy and the predicted growth in patronage.”
The franchise is expected to run for a period of around 7 to 9 years, with the provision for an extension of one year at the discretion of the DfT.
An announcement about the successful bidder is expected in autumn 2015, with the contract expected to start in February 2016.
One of the shortlisted companies, Stagecoach, said the TPE rail franchise was a key part of the North of England’s infrastructure, supporting economic growth and connecting communities – and the company was delighted to have been shortlisted by the Department for Transport.
A spokesmand added: “Stagecoach has played a leading role in transforming rail travel in Britain over the past two decades, bringing new ideas and putting customers at the heart of the railway.
“We look forward to engaging with local people and other stakeholders to develop a package of ambitious and robust proposals that will improve services and deliver better value for money to passengers and taxpayers.”
Mick Cash, RMT Acting General Secretary, criticised the Government for releasing ths hortliost just horus after a consultation process into the future of the services closed.
Mr Cash added that the shortlist contained “the same old greedy companies looking to hitch yet another ride on the rail privatisation gravy train purely in the interests of private profit”.
He said: “It makes a mockery of the consultation that this list of the greedy and the incompetent has been drawn up by the Government before the consultation responses have even been opened and before these companies even know what it is that they are bidding for.
“RMT said from the off that the consultation was wholly bogus, this morning’s outrageous manoeuvring has proved that conclusively and RMT will use every tool at our disposal to expose this racket for what it is.”
Both franchises are due to be awarded by October 2015 and as they develop their bids each of the bidders will need to set out how they will capitalise on the biggest programme of rail modernisation ever.
The Government says that than £1billion will be spent on the rail network in the north over the next five years.
The potential operators will need to demonstrate how they will use these projects to increase capacity in order to tackle crowding and meet future passenger demand; provide faster and more frequent services; and upgrade rolling stock, including proposals to replace Pacer trains on the Northern franchise. Bidders will also need to improve customer service and passenger satisfaction.
The Northern and TransPennine Express franchises carried more than 110 million passengers last year, covering inter-urban, commuter and rural routes. The franchises connect passengers travelling into and between the key strategic cities of Leeds, Liverpool, Sheffield, Manchester and Newcastle, and onwards to Edinburgh and Glasgow.
A public consultation into the future of rail services in the north closed on Monday and responses will be taken into account as the franchise proposals are developed further ahead of the Invitations to Tender in December.
Source – Northern Echo, 19 Aug 2014