LibDems join rail franchise row

THE Liberal Democrats today backed union calls for National Express to be stripped of its two rail franchises covering Suffolk, Essex and Norfolk.

THE Liberal Democrats today backed union calls for National Express to be stripped of its two rail franchises covering Suffolk, Essex and Norfolk.

The demand came after the Government announced that the National Express East Coast franchise, covering the King's Cross to Scotland main line, would be taken back into public ownership next week - a month earlier than expected.

Private sector operator National Express announced in July that it planned to give up the loss-making East Coast franchise after bidding heavily to run services on the line in 2007 - before the impact of the recession.

Transport Minister Lord Adonis said today that the franchised would transfer to a Government-controlled company at one minute before midnight on November 13. A document released by union leaders earlier this week gave a date of December 12 for taking the franchise back into public ownership.

However, Lord Adonis issued a formal termination notice to the company after the close of stock market trading yesterday. The franchise will transfer to a new operator, Directly Operated Railways, trading as East Coast.

In a written statement today, he added: “I can assure the travelling public that services will continue without disruption and all tickets will be honoured.”

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National Express was committed to pay the Government �1.3 billion in premiums under the franchise, but passenger revenues were hit by the recession and talks with the DfT about easing the terms of the deal foundered earlier this year.

Lord Adonis made no reference in today's statement to the group's National Express East Anglia franchise or its south Essex commuter service c2c but the Government has previously threatened to strip the group of its other rail deals under “cross-default” provisions.

Bob Crow, general secretary of the Rail Maritime and Transport union, yesterday welcomed the earlier than expected termination of the East Coast deal and repeated his call for National Express to be stripped of its other rail deals as well.

And Liberal Democrat transport spokesman Norman Baker backed the demand, saying: “The Government should now take away the other two National Express rail operations - c2c and East Anglia - otherwise they'll become lame duck franchises.”

However, the Conservative's shadow transport secretary, Theresa Villiers, blamed the failure on Labour's approach to the rail franchise process.

“A franchising system that has focused so strongly on squeezing passengers for higher and higher fares and pushing train operators to make wildly optimistic bids was always going to risk producing casualties like this one on the East Coast line,” she said.

Staff currently employed by National Express East Coast will transfer to the new operator, with services likely to remain in public hands until 2011.

In an internal message to staff yesterday, David Franks, chief executive of the National Express Group, said the East Coast business was ready for an “orderly handover”.

“Focus on operational performance has been exemplary and the business has seen a steady climb off the bottom of the national performance league to the extent that only two weeks ago East Coast was named as the most improved train operating company in the UK,” he said.

“The National Passenger Survey results have similarly improved, returning the East Coast franchise to its rightful position as the best long-distance operator.”