Government Takes Over East Coast Rail Service
Monday, July 6, 2009 12:08
Troubled rail operator National Express is to be stripped of its key East Coast franchise by the government. Ministers stepped in after the recession-hit company failed to pay an agreed instalment of £138 million to the state.
The service is set to be taken over by a public company later this year and is to remain under the government’s wing for about 12 months. Transport secretary Lord Adonis gave an assurance that there would be no ‘disruption or diminution of service standards’.
News of the takeover came as the rail operator announced its chief executive–Richard Bowker, was leaving to take up a job in the Middle East. He did not depart with a payout but received a £231000 bonus last year.
National Express won the London to Edinburgh franchise in 2007, after it was surrendered by GNER. It agreed to pay the government £1.4 billion to run the line until 2015. Lord Adonis warned other rail franchise run by National Express could come under threat. National Express said the government would have no frounds to do this as its other rail franchises were performing strongly.
Bob Crow, general secretary of the RMT transport union, welcomed the government’s response but said it should not be a short-term crisis measure. He added, it should be a long-term solution to the chaos that privatisation has brought to the UK’s most lucrative rail franchise.
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