Tagged: Directly Operated Railways

Train passengers ‘angry and disappointed’ as East Coast is reprivatised

Train passengers in the North East expressed their “disappointment and anger” over the reprivatisation of East Coast train services.

The franchise was handed over to Stagecoach and Virgin – an act rail users in Tyne and Wear described as a “fait accompli.”

Our publicly owned East Coast rail returned money to the taxpayer over the last five years, contributing to £1 billion to the government – far more than when it was run by private companies GNER and National Express,” said Vicki Gilbert, chair of the Tyne and Wear Public Transport Users Group.

“For rail passengers from the North East and elsewhere, it is likely that there will be new larger fare increases along with cuts in costs, by reducing the staffing on trains and at stations.

“This will mean a poorer service for passengers, while profits go into the pockets of the Stagecoach and Virgin’s companies shareholders.

“This cost cutting is very concerning for everyone but particularly for the disabled and vulnerable, who rely on assistance with wheelchairs and pushchairs.

“This will also affect passengers’ personal security, with figures already showing an increase in violence, drinking, anti-social behaviour and attacks across the entire rail network in England.”

Jarrow MP Stephen Hepburn also expressed his opposition to the move, which the government hopes is a case of third time lucky after two previous private franchises running the line collapsed, causing it to be placed into the hands of the state owned Directly Operated Railways in 2009.

“Over the past six years since it was re-nationalised the East Coast mainline has gone from strength to strength and it is a disgrace that the Tories are selling it off before the election,” Mr Hepburn said.

“The Tory-led Government’s plans defy all logic and by taking East Coast out of public ownership all the government is doing is passing the income the line raises into the back pockets of the profiteers.”

Under the new name of Virgin Trains East Coast, the franchise’s first service left Newcastle bound for London at 7.55am on Sunday.

The Department for Transport said it was confident that the new franchise was the best way forward, but trade unions have pointed to the huge sums the publicly owned line has been able to return to the Treasury.

TUC general secretary Frances O’Grady said:

“It is disappointing to see East Coast in private hands after five years of public sector success. The Government’s decision to re-privatise the line is a costly mistake.”

But a Department for Transport spokesman said:

“The skills and experience that the private sector provides drives forward innovation and investment, and has helped to transform our rail network into a real success story.

“We are confident that the new East Coast franchise gives the best deal for passengers. It will provide more seats, more services, new trains and over £140 million of investment along the route. In addition, more than £3 billion will be paid to taxpayers.”

Source – Newcastle Evening Chronicle, 02 Mar 2015

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Former Tory Minister criticises decision to prevent in-house operator from bidding for East Coast Mainline

THE decision to prevent the current public-owned railway company from bidding to run the East Coast line has been criticised by a Conservative former Cabinet minister.

Lord Forsyth of Drumlean said the point of a competitive process was to allow the best company to win.

His comments came after transport minister Baroness Kramer had defended the decision to prevent Directly Operated Railways – which was set up by the Government in July 2009 to run the East Coast franchise – from bidding to continue its operations.

The franchise is due to revert to the private sector in March next year and Lady Kramer said it was a difficult industry for a public company to operate in.

She said:

“It costs something like £7-10mto put in a bid with no assurance of winning. It is certainly a high-risk industry and the margins, even for a successful and profitable company are quite fine.”

 “There are a very different set of skills when you are looking at significant new investment, when you are looking at growth. This is the point we have reached with this franchise.”

But Lord Forsyth told her:

“Surely you would recognise that the whole point of competitive tendering is to get the best value and the best deal for the taxpayer and if you are right that a state owned company wouldn’t be able to compete why is that a reason to exclude it from the process?”

Lady Kramer replied:
“You can see the complexity of a state-owned company being involved in this. Would you give it preferential financing or would it go out into the market?

“Do you want to set a company, pay its senior management very high fees with the possibility of bids of £7-10 million that it might eventually achieve a franchise?

“I have to suggest the history of companies run over the long term by the UK government has not been one of outstanding success.”

Labour peer Baroness Quin said at question time in the House of Lords:

Many of us who use the East Coast rail service regularly are dismayed that the Government has refused to allow the current publicly owned operator, which has greatly improved the service both for the benefit of passengers and UK taxpayers alike to even bid for the franchise and continue running a good service.

“Doesn’t it seem odd that the Government allows foreign state-owned enterprises to run our rail services in part and yet refuses to allow a successful home-grown enterprise to do so?”

Labour transport spokesman Lord Davies of Oldham said:

“Only a Government addicted to dogma would dispense with a company, an organisation which has run the line so successfully and put it out to bidders of which a successful one may be a state-owned company of another country’s railway.”

Source –  Northern Echo,  28 Oct 2014

Fresh protests planned in North East against the re-privatisation of East Coast mainline

> If you have a state-run organization that is doing its job well and is making money for the country, what do you do ?

Leave it alone to get on with it ?  Of course not, you sell it off to private enterprise. Or at least you do if you’re a British government…

A fresh round of protests against the re-privatisation of the East Coast mainline are being planned after it emerged it has paid £235m back to the Government this year.

The figure means that since the line returned to public hands after the collapse of the privately run National Express franchise in 2009, it has generated £1bn in revenue for public coffers.

Despite this, the re-privatisation process will see a new franchise bidder chosen in November. It will then take over its running from Directly Operated Railways in March next year.

Rail union RMT said the £235m figure, an increase of 12% on last year, makes a mockery of the Government’s plans to “bulldoze through a re-privatisation before the next election”.

It says the Government is ignoring the financial and operational success of DOR and the “catastrophic impact of two previous private sector failures on the line”.

The RMT pointed out that the short-listed bidders for the re-privatisation included other European state rail operators, notably Keolis which is tied in with the French state railways.

This proves once again that the Government are happy to have state control of our main inter-city routes as long as it’s not the British state,” said an RMT spokesman.

He added: “We’re looking to organise a whole range of protests at stations on the East Coast mainline, including those in the North East.”

Meanwhile RMT Acting General Secretary Mick Cash commented: “It is a national disgrace that the Government are continuing with their plans to bulldoze through the re-privatisation of the East Coast Main Line despite the latest figures showing that it is handing massive sums back to the British people while delivering huge improvements in service and customer satisfaction.

“It is simply ludicrous to even contemplate re-privatisation when not only have there been two previous private sector failures on the East Coast route but when the public-sector rescue operation has been such a stunning success.

“While public ownership puts money back into the coffers that can be reinvested in our railways the private operators suck out colossal sums in subsidies and profits – that’s what privatisation means.

“The plans to hand this profitable and successful public rail operation back to the vultures are based purely on hard-right political ideology and RMT is committed to continuing the fight to block them up to polling day and beyond.”

Following privatisation of the railways in the 1990s, GNER was awarded the East Coast franchise in April 1996, to run what had been the InterCity East Coast division of British Rail.

However, in December 2006, the Department for Transport announced that it was to terminate GNER’s franchise to operate the East Coast main line after it ran into financial difficulties.

In August 2007 it was announced National Express Group had been awarded the franchise, operating under the name of National Express East Coast. However in July 2009 it said it would not be able to financially support its East Coast franchise beyond the end of 2009 when it returned to publics hands.

The three shortlisted bidders for the 393 mile route between London and Edinburgh are:

:: East Coast Trains Ltd (First Group plc)

:: Keolis/Eurostar East Coast Limited (Keolis (UK) Limited and Eurostar International Limited)

:: Inter City Railways Limited (Stagecoach Transport Holdings Limited and Virgin Holdings Limited)

Source – Newcastle Evening Chronicle, 04 Aug 2014

Legal battle looms over sell off of East Coast main line

Rail unions have launched a legal battle with the Coalition Government over the sale of the East Coast Main Line.

They claim the planned “re-privatisation” of the service before the next general election in 2015 is being rushed through and that ministers have “cut corners”.

The rail unions Aslef and the TSSA said their members’ jobs and conditions, as well as the interests of passengers and taxpayers, were being threatened by a lack of consultation.

They are seeking a judicial review over the matter and are also challenging extensions to the Thameslink and Great Northern franchises.

Aslef general secretary Mick Whelan said: “It is imperative that we raise the genuine concerns of all stakeholders but, especially, the employees before this is rushed through. We cannot, in good conscience, allow the mistakes of the past to happen again.”

The East Coast Main Line franchise, which runs from Edinburgh, through the North East to London, has been in Government hands since November 2009 when the then franchise holders National Express gave it up, saying it could not afford to run it any more.

Before that, from 1996 to December 2007, it had been run by Great North Eastern Railway before it had the franchise taken away due to poor financial management.

It has been run for the Government since 2009 by Directly Operated Railways, which last year returned more than £200m to taxpayers as a result of its stewardship of the line.

In January the Government published a shortlist of three bids to run it as part of plans for the rail route’s re-privatisation. The bidders were FirstGroup, a joint bid from Eurostar and French firm Keolis, and another from Virgin and Stagecoach.

RMT acting general secretary Mick Cash said: “After the scandal of this Government robbing the British taxpayer of a billion pounds in the scramble to privatise the Royal Mail it is shocking that they are engaging in the same tactics to try and hand the East Coast Main Line back to their friends in big business.

“The British public have a right to openness and transparency when it comes to the ideologically-driven attempt to sell off Britain’s most successful rail-route to the speculators and chancers after two previous private sector failures on the same line.”

TSSA leader Manuel Cortes said: “The coalition knows only too well that rail franchising is not fit for purpose. Rail workers are at a loss to understand why the Government insists on going forward with a broken system which threatens the interests of passengers and taxpayers.

“We can only conclude that the ideology which saw Royal Mail flogged off on the cheap continues to thrive.”

A Department for Transport spokeswoman said: “We will vigorously defend this claim and remain committed to the franchising programme.

“As these legal proceedings are ongoing it would not be appropriate to comment further at this stage.”

Source – Newcastle Journal  07 April 2014

Campaigners gather to protest at the re-privatisation of the East Coast Main Line

Protests have been taking place across the country against the Government’s controversial plan to sell off the East Coast Main Line.

Campaigners gathered at stations up and down the line – including York, Durham and Newcastle – to greet travellers and press home their argument.

The protest by Action for Rail was deliberately timed to co-incide with the beginning of the Liberal-Democrats’ spring conference in York this weekend.

The campaign, backed by the TUC and railway unions, is fighting the Government’s proposals to re-privatise the route – the only remaining publicly-owned railway in the UK.

It has been in public ownership since 2009, after two previous private train operators were forced to bail out of the franchise for financial reasons.

But last October ministers announced plans to re-privatise the line and more than 60 MPs have since signed an early day motion calling on the government to keep the line public.

The campaigners argue that Directly Operated Railways – the public operator of the line – has achieved record levels of customer satisfaction and provided the highest returns to the taxpayer while receiving the lowest public subsidy among all the train companies.

TUC general secretary Frances O’Grady said: “Privatising the East Coast defies all logic. Since it was re-nationalised the line has gone from strength to strength.

“This decision shows the government is clinging on to its outdated faith in privatisation at all costs and is determined to remain blind to the fact that public ownership has been a success for taxpayers and passengers alike.”

Source – Northern Echo,  07 March 2014