Economy

East Coast rail bidders revealed amid privatisation criticisms

Published

11 years ago

January 20, 2014

Blue & Green Tomorrow

The government has revealed the shortlist of bidders that will be invited to deliver proposals for the East Coast rail franchise, as part of a privatisation plan. Trade unions have criticised the move saying the route should remain in public ownership.

The franchise has been publically run since 2009, when the previous operator had financial difficulties. It is expected a private sector company will take over operations next year. FirstGroup has been shortlisted, along with joint bids from Eurostar and Keolis and Stagecoach and Virgin.

Rail minister Stephen Hammond commented, “We have embarked on one of the biggest programmes of rail investment ever, with over £35 billion being spent to enhance and run our rail network over the next 5 years.

“But for our railways to continue to grow we need strong private sector partners who can invest and innovate in ways that deliver a world class service.”

Privatising the franchise has received criticisms. Manuel Cortes, leader of the TSSA rail union, said, “This is nothing short of economic vandalism by a Chancellor who does not want voters to know the truth about the East Coast line – it is a public sector success story.

“It has been the cheapest franchise to run for the past five years and it has produced the greatest return to taxpayers, over £600 million. By selling it off before the election, he wants to hide those facts.”

Cortes added that the UK has the highest rail fares in Europe because it is the only country with a fragmented privately run rail network.

At the beginning of the year fares increased by an average of 2.8%, with some travellers and commuters facing prices hikes of up to 5.1%.

In response to the increases, Bob Crow, general secretary of RMT transport union, said, “The link between privatisation, high fares and the repeated disruption to services could not be clearer.”