Posted 11th January 2017 | 6 Comments

National Express to sell c2c to Italian railways

NATIONAL EXPRESS is set to sell its last British rail franchise to the Italian state operator FS.

Trenitalia, part of FS Italiane Group, will acquire the c2c franchise for some £70 million, yielding a 'small net profit' for the Group. The deal is subject to the consent of the Department for Transport, and existing c2c management and staff are to be retained.

It will also mark the exit of National Express from the franchised rail sector in Britain, although it still has the concession to operate Midland Metro trams. At one time National Express held the largest number of franchises, which included ScotRail, Midland Mainline and Central Trains.

The Group had a major setback in 2009, when it surrendered the Intercity East Coast franchise.

National Express said while it was not ruling out the operation of future franchises, it had seen 'significant growth in North America and continental Europe in recent years' and that it believes there are further opportunities there. It has already acquired rail franchises in Germany.

Meanwhile, the acquisition has been described as the 'first step' in Trenitalia’s plans to expand in the rail franchise market in Britain.

Trenitalia became the first new entrant to be awarded a “PQQ Passport” by the Department for Transport in December 2015.

National Express chief executive Dean Finch said: “National Express has been immensely proud of c2c’s transformation on our watch. From converting c2c into the UK’s consistently best performing franchise, we have also recently pioneered customer service standards with automatic delay compensation and flexi-season tickets, for example. While this has, therefore, not been an easy decision, the board believes the transfer of c2c to Trenitalia UK presents opportunities for all concerned.

“We have been impressed by the commitment and interest shown by Trenitalia and are grateful for the support shown by DfT in this process. Trenitalia has significant rail credentials and is excited by the opportunity to invest in the new agenda set out by the Secretary of State. For National Express, while not ruling out participating in future UK rail bids, this allows us to pursue further growth opportunities in the markets where we have seen strong returns in the recent years.”

Trenitalia CEO Barbara Morgante,said: “We see significant chances to invest in UK Rail and this in principle agreement with National Express allows us to foster these ambitions. This is why we are extremely delighted to have this exciting opportunity to run the UK’s consistently best performing railway and serve the people of East London and South Essex. We will work closely with customers and local stakeholders to apply our vision and deliver improvements that will be visible and valuable; we are confident that British customers will benefit from our skill and capabilities developed in the highly competitive Italian market.

“We are also closely monitoring the Railways Franchising Programme as we intend to participate in tenders issued by the DfT to strengthen our presence in UK.”

Reader Comments:

Views expressed in submitted comments are that of the author, and not necessarily shared by Railnews.

  • david c smith, Bletchley

    I am a politically non- aligned "floating voter", but having lived through the era of nationalised industries, I have to say that nationalisation just doesn't work.

    There may well be forms of public ownership that can work - I just wonder whether captive - market operations such as Southern would best be run as cooperatives accountable to local stakeholders via direct demoocracy.

    Intercity type services might, on the other hand be best run on a commercial competitive open - access basis. Horses for courses !

  • Roger Capel, Sheffield & Glossop

    Can't see NatEx maintaining a UK Rail division just for West Midlands Trams. Surely it'd make more sense to follow the Edinburgh lead & a closer integration with Nat Ex's "Travel West Midlands" bus operation.

  • James Dawkins, Sheffield

    Golden opportunity to nationalise, after all aren't we "taking back control" from foreign powers?

    I know, I'm dreaming.

  • MikeB, Liverpool

    Totally agree Alan. The Tory philosophy is that only the private sector is capable of running national enterprises, such as railways, utilities (gas, electricity and water), postal services etc. They fail to realise however, that other countries can make a global success of their state enterprises, with handsome profits that benefit their taxpayers.

  • Simon S., Hagen, Germany

    As an answer to Alan McMillan:
    I am from Germany and it doesn’t seem as if DB invests any money from Arriva into the German rail system. Apart from the ICE, most trains are rather old, delayed and outside of fare associations also quite expensive. Except for Berlin or Munich central stations, all stations are rather ugly and not really enjoyable. DB’s customers don’t get anything from DB’s operations in the U.K.

  • Alan McMillan, Edinburgh

    If the government had created a "British Railways Plc" model as was mooted by some back in 1992/93, we could have been doing this and buying up other peoples' railways so we could have the benefit of profit-subsidised infrastructure and fares as is the case now with DB, NS and now, it seems FS.
    As it is, the Tories decided to create a shambolically fragmented system in Britain that they seem happy to pimp out like a cheap prostitute to the highest bidder of whatever nationality as long as the price is right.
    I know this deal is yet to be cleared by the government, but you can bet your life it will be.
    Praise be to the god of Mammon!