Bri­tain to re­na­tion­alise rail line, new row ig­nited

The Gulf Today - Business - - FRONT PAGE -

LON­DON: The Bri­tish government is re­na­tion­al­is­ing the rail route be­tween Lon­don and Ed­in­burgh, tak­ing back the line from a pri­vate com­pany af­ter it over-es­ti­mated prof­its, in a step likely to reignite a de­bate over pub­lic own­er­ship of the UK’S rail­ways.

The government said on Wed­nes­day it was scrap­ping the con­tract with Lon­don-listed Stage­coach five years early and would op­er­ate the line, which car­ries 22 mil­lion peo­ple an­nu­ally, for 2-3 years be­fore set­ting up a new pub­lic-pri­vate part­ner­ship.

It is the third time since 2007 that the 393-mile (632 km) flag­ship route be­tween the English and Scot­tish cap­i­tals has been re­turned to government hands af­ter con­tracts failed, giv­ing am­mu­ni­tion to the op­po­si­tion Labour party which op­poses pri­vati­sa­tion.

The Labour party has pledged to na­tion­alise in­dus­tries like rail and wa­ter, poli­cies which have been pop­u­lar in the polls, and which helped Labour deny the pro-pri­vati­sa­tion Con­ser­va­tives a ma­jor­ity government at last year’s elec­tion.

Trans­port Min­is­ter Chris Grayling tried to ap­peal to both par­ties on Wed­nes­day with a prom­ise that af­ter a spell un­der government con­trol, he would set up a new “part­ner­ship be­tween the pub­lic and pri­vate sec­tors” to run the line.

The fran­chis­ing model, also part of the rea­son for de­lays on a con­tract in the Lon­don area, has come un­der fire re­cently with a cross-party par­lia­men­tary com­mit­tee call­ing it “bro­ken” in April.

Rail union Unite called for all rail lines to be na­tion­alised.

“It would be best for the econ­omy, the trea­sury and the hard-pressed rail trav­eller pay­ing through the nose for their tick­ets, if min­is­ters blew the whis­tle on rail pri­vati­sa­tion,” Unite rail in­dus­try of­fi­cer Hugh Roberts said.

Rail ser­vices in Bri­tain were pri­va­tised in the 1990s with routes grouped into fran­chise sand op­er­a­tors con­tracted to run ser­vices for a set num­ber of years, promis­ing pay­ments to the government at the same time as mak­ing prof­its for them­selves.

Grayling had said late last year that the East Coast fran­chise run since 2015 by Stage­coach, which owns 90 per cent along­side Virgin, would need to end early af­ter lower than fore­cast pas­sen­ger num­bers led to losses of about 200 mil­lion pounds for Stage­coach.

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