Transpennine rail company takes fire over £75m payouts
A TRAIN operator that runs some of Britain’s worst-performing services is facing calls to halt a programme of returning £75m to shareholders.
Firstgroup, the listed company behind the Avanti West Coast and Transpennine Express operators, launched a share buyback programme shortly before Christmas to return the proceeds of the sale of Greyhound bus depots in the US to its investors.
Louise Haigh, the Labour shadow transport secretary, is demanding the money is used to improve rail services.
Matthew Golton, Transpennine Express chief, was forced to issue a fresh apology last week after admitting services were “not good enough”.
Industry sources now expect the operator to be nationalised as bosses grapple with persistent cancellations and delays. The Government has set up a shell company to take control of the operator as and when it is needed.
The operator runs trains from Liverpool and Manchester in the west to Hull in the east and as far north as Edinburgh and Glasgow.
Avanti West Coast, meanwhile, which runs intercity services from London’s Euston station to Birmingham, Manchester and Glasgow, suffered a fresh setback last week after the rail regulator said a recovery plan to improve performance had stalled. On Saturday, the operator cancelled “a large number” of services, blaming high staff shortages. The cancellations were a setback for travellers looking for alternative transport after the collapse of regional airline Flybe on Saturday.
Avanti and Transpennine are still entitled to multimillion-pound “performance fee” bonuses under complex contracts with the Government.
Ms Haigh said: “Their services have been totally unacceptable yet ministers have continued to reward Firstgroup with taxpayers’ money in so-called performance fees which many will see as a sick joke. Now we see money being used to issue a share buyback, when Firstgroup should be throwing everything at delivering the timetable they are contracted to provide.”
Firstgroup said: “The funds involved in the share buyback come directly from the sale of our legacy Greyhound property portfolio in the US and are not derived from our UK rail or bus operations. We are continuing to invest in our bus and rail businesses in the UK.”