Jim Armitage: We're on wrong track by giving Foreign Rail this platform

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Downing Street is vigorously opposed to trains being run by Britain’s government, but it’s relaxed about handing them over to others.

Today’s withdrawal from UK rail by National Express to make way for yet another foreign government-owned operator marks a major chapter in the rail privatisation story. 

Not so long ago, National Express was the biggest rail operator in the country. Now, it walks away altogether.

State operators from Holland, Hong Kong, Germany and now Italy repeatedly outbid British firms for franchises. 

The reason’s simple: with entire countries behind their balance sheets rather than mere private shareholders, they are more able and willing to overpay for contracts. Where does that leave passengers? Perhaps better off: wealthy state-backed firms may be less likely to dump loss-making contracts halfway through. 

But don’t get too optimistic: Southern’s part-owner Keolis is controlled by the French state’s Sncf, and look at the mess there. 

As for the remaining private incumbents, Stagecoach, Virgin, FirstGroup and Southern’s majority owner Go-Ahead, today’s sale of c2c to Trenitalia can only be bad. The arrival of yet another aggressive foreign state player to compete for contracts was the last thing they needed.

How long before the replacement of British Rail with Foreign Rail  is complete?

Source Article from http://www.standard.co.uk/business/jim-armitage-we-re-on-wrong-track-by-giving-foreign-rail-this-platform-a3438036.html

January 12, 2017 |
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