Tagged: rail franchises

East Coast Main Line makes £13 million profit – while other rail services lose millions

> 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.”

She added:

“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

Advertisements

Union’s fears for Tyne Valley rail line

Railway workers mounted a protest at Hexham railway station on Tuesday against what they describe as the biggest threat to railway services since the Beeching Axe of the 1960s.

At the same time, there were angry protests at rail company Northern Rail’s decision to axe off-peak fares on the  Tyne Valley line – a decision which will hit hundreds of local commuters.

The protests have been sparked by the Department for Transport’s consultation exercise on the future of the Northern and Trans Pennine rail franchises, drawn up in conjunction with Rail North, a conglomeration of 30 Northern local authorities.

Railway workers’ union RMT say the proposals will result in fare rises, service and timetable cuts and the loss of hundreds of essential rail jobs.

They also feel passenger service and safety will be affected by the proposed introduction of driver-only operation, the sacking of train guards, conductors, station de-staffing and ticket office closures.

Union members are particularly concerned that the proposed cuts will impact on disabled, older and women passengers.

The consultation is due to end on Monday of next week.

Further fuel has been added to the fires of discontent by Northern Rail’s announcement this week that, with effect from Monday September 8, off-peak tickets can no longer be used during weekday evenings on local rail services between Hexham and Newcastle.

Customers who currently use off-peak tickets during the evening peak will either have to travel earlier or later, or buy an anytime ticket.

> Although if they get rid of all the conductors and guards, who will be checking tickets anyway ?

The rail company claims the majority of customers who travel at the evening peak time already buy season tickets or anytime fares and won’t be affected by this change.

They could also find their trains are less crowded.

Commercial director, of Northern Rail, Richard Allan, said: “The majority of customers will be unaffected by these changes, but we want to make sure that those who are know about what is happening.”

Off-peak day/duo tickets will no longer be valid on weekdays on all services between Hexham and Newcastle between 4pm and 6pm.

Regular travellers could benefit from season tickets, which can be purchased for a week, month or year, and offer significant discounts.

The changes are being made after the DfT asked Northern to look at several options to help reduce subsidy as part of its new franchise agreement.

The franchise agreement includes commitments to invest in more customer information systems, better retailing facilities and environmental initiatives, which will lead to over £6m being invested to improve facilities for customers.

However, RMT has described the move as “a savage kick in the teeth for the travelling public”.

Acting general secretary of the RMT, Mick Cash, said: “People are already struggling with the burden of low pay and austerity and the fact that this has been cooked up by the Department for Transport in collusion with the privatisation pirates from Northern Rail is a warning of what’s to come.

“Let’s not forget that the core of the Government’s future plans for Northern and TPE is to axe jobs, throw the guards off the trains and jack up fares, while capacity to meet surging rail demand in the area is left to stagnate.

“The attack on the fare-paying public has already begun.”

Source –  Hexham Courant,  20 Aug 2014