East Coast Main Line set to go public
The Government is to take over the running of the East Coast Main Line through a publicly-owned company when National Express East Coast ceases to operate, Transport Secretary Lord Adonis said today.
The Government is to take over the running of the East Coast Main Line through a publicly-owned company when National Express East Coast ceases to operate, Transport Secretary Lord Adonis said today.The rail service, which is used by thousands of Peterborough commuters every day, is run by the struggling transport group National Express.
The firm has confirmed that it is to walk away from its loss-making East Coast rail franchise by the end of the year.
The company has failed to agree a renegotiation of the deal – agreed on over-optimistic assumptions before the recession – with the Department for Transport (DfT).
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Barring a dramatic improvement in trading – the rail franchise is expected to lose more than 20 million during the first half of this year – National Express said the DfT was likely to take back control of the franchise later this year.
National Express has also confirmed that its chief executive is to resign. Richard Bowker, who joined the group in 2006, will leave at the end of August to take up a new role as head of Union Railway in the United Arab Emirates.
The problem with the East Coast franchise was that National Express had to pay back to the Government a total of 1.4 billion in premiums over the life of the franchise.
But passenger growth has stalled in the recession and the company has failed to renegotiate the franchise with the DfT.
Today, National Express said it was no longer willing to provide financial support for the franchise.
Lord Adonis said: "I have therefore established a publicly-owned company, which will take over this franchise from the point at which National Express East Coast ceases to operate.
"We will agree an orderly handover with National Express. Until that date, National Express will operate services on the current basis; after that date the new public company will do so."
He added: "There will be no interruption of services. Existing operational staff – who continue to provide a good service – will transfer to the new East Coast Main Line company; so will the assets necessary for the continuation of the service. I can assure the travelling public that services will continue without disruption and all tickets will be honoured."
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Friday 19 March 2010
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