Four make bids to operate the Metro

Feb 3 2009 by Adrian Pearson, The Journal

INTERNATIONAL rail companies, some owned by European Governments, have entered into a battle to run Metro trains as Nexus prepares to select a new rail operator.

Hong Kong based MTR Corporation is up against German state-owned DB Regio. Also bidding to run trains and stations are Dutch-based Serco-NedRailways and an in-house Nexus team.

Unions have warned the process will lead to a “profits before standards” mentality and claimed the bidding process is the start of the privatisation of the Metro.

Last night the region’s MPs were putting their name behind the in-house bid as the fight to keep Metro public appeared to intensify over claims European states are being freed up to invest in a railway system the Government has “turned its back on”.

Stan Herschel, the RMT’s regional organiser, said “It’s just ridiculous and makes us even more determined to fight against this needless privatisation”.

Nexus, which will let the concession, says it will continue to own all trains, set fares and specify the service including first and last trains and frequency in between. Of the three private companies all have UK operations, with Northern Rail operator Serco-Ned the most closely connected to the region. Serco-Ned is formed from two companies one of which, Nedrail, is part of Holland’s state-owned equivalent of British Rail. And DB Regio is one arm of the German state-owned Deutsche Bahn rail company.

The bidding war is the result of Government rules which insist a £300m investment package for the Metro will only be handed over if private businesses are at least considered to run services. There is nothing to prevent an in-house team winning the contract provided it proves best value for money.

Kevin Rowan, the TUC’s regional secretary, last night led calls for the railway to remain publicly owned.

He said: “It is an excellent example of public service delivery in the public sector, the fact that Nexus have been nominated for the train operating company of the year award is testament to the terrific staff working on the Metro.

“We are confident that the service can remain within the public sector – and adamant that it should.” And Newcastle Central MP Jim Cousins added his voice to those describing the contract process as an attempt to privatise the railway.

Mr Cousins said: “Metro is one of the most successful public enterprises in England. I will do everything I can to keep it as a public enterprise.”

Bernard Garner, director general of Nexus, said: “This is a significant milestone in the Metro: all change modernisation programme, which will deliver better urban transport for the people of Tyne and Wear.”

A preferred bidder is due to be named in November with final contracts being signed in January 2010 .