China joins UK railway carve-up

THREE quarters of Britain’s railways are now run by foreign companies after ministers awarded one of Britain’s biggest franchises to a Chinese state-owned operator.

MTR, which operates Hong Kong’s Mass Transit Railway metro system, will run South West Trains with Aberdeen-based FirstGroup for seven years from August.

MTR is owned by China through the Hong Kong government. It owns 30 per cent of the First MTR consortium, which struck the deal. FirstGroup owns 70 per cent.

Transport Secretary Chris Grayling described the deal as ‘great news for rail passengers’ who ‘can look forward to modern trains, faster journeys and a more reliable service’. But the RMT union said Britain’s railways have become a ‘licence to print money’ for foreign states and overseas companies. It found that of the 28 private rail contracts, 21 are partially or wholly owned by foreign state-backed firms.

General secretary Mick Cash said: ‘Once again the Government has refused to consider the public sector for a major rail franchise, and instead it’s a foreign state operator set to make a killing at the British taxpayers’ expense.’

Huw Merriman, a Tory member of the Commons transport committee, responded to the criticisms by pointing to the union’s record of recent strikes. He said: ‘Given that the RMT’s industrial action has been responsible for daily delays and cancellations to hundreds of thousands of rail users, they are not best placed to pick on foreign companies who are seeking to improve our railway.’

Government insiders stressed the infrastructure will still be owned by Network Rail.

FirstGroup started out in 1995 as FirstBus, which came from the merger of former companies Badgerline and Grampian Regional Transport, and was renamed in 1997.

In 2004, it won the franchise to operate ScotRail train services, a partnership that lasted until March 2015 when the service was taken over by Dutch company Abellio.