Crisis after £1.4bn East Coast rail franchise collapse

Jul 2 2009 by William Green, The Journal

“National Express was only allowed to take it on terms that yielded big returns for the DfT.”

Business chiefs said the smooth running of the route was critical and urged the Government to avoid service cuts.

James Ramsbotham, chief executive of the North East Chamber of Commerce, said: “The Government has a job to do to find the right operator in the future. On behalf of our members, we will be liaising with the relevant officials to make sure they are aware of the importance of this route to business users.”

Anthony Smith, chief executive of rail customer watchdog Passenger Focus, said passengers had become “increasingly squeezed between the Government and the train operating company in an unrealistic deal”.

Prime Minister Gordon Brown said: “We are making sure that the service continues to run, passengers continue to be served and jobs continue to exist.”

Unions and Northern Labour MPs called for nationalisation, while the Tories accused the Government of “incompetence” and the Lib Dems said East Coast services should stay in public hands.

Transport Secretary Lord Adonis warned there might be grounds to terminate National Express’s other rail franchises – East Anglia and the London to Tilbury and Southend operation c2c.

National Express said it would only support its East Coast operation until committed funding ran out “expected to be later in 2009” as it emerged company boss Richard Bowker was quitting.

New chief operating officer Ray O’Toole insisted there was a possibility the company would continue running services next year if the economy recovered.

However, the Government signalled later that National Express could not bid for new franchises.

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