Posted 12th May 2011 | 9 Comments
Union calls for ban on further FirstGroup franchise bids
THE largest rail union has demanded that FirstGroup should be banned from bidding for any further rail franchises, after the Group announced that it would not be taking up the option to run Great Western for three years from 2013. It will, however, bid for the next GW franchise.
The company had indicated in March that it was considering whether to continue with the franchise after 2013.
The RMT said the decision had saved the Group £826 million in premium payments which would have become due in those years, and dubbed the decision as 'scandalous'.
FirstGroup chief executive Tim O'Toole told the Stock Exchange that the decision had been a 'commercial' one.
Mr O'Toole said: "The Government has announced franchise reform and major investment in the region including the redevelopment of Reading station, resignalling and electrification of the Great Western Main Line, the Intercity Express Programme and Crossrail. With our unique knowledge of the franchise we believe we are best placed to manage these projects and capture the benefits through a longer-term franchise. We will continue to operate First Great Western until March 2013 and will meet all of our obligations under the Franchise Agreement."
When the newly-enlarged 'Greater Western' franchise was awarded to FirstGroup in December 2005, the Department for Transport said that the Group had 'undertaken to pay DfT a premium of £1,131 million over 10 years', and the transport secretary at the time, Alistair Darling, hailed the contract as "a good deal for the taxpayer".
The DfT had also said that the contract had been let for ten years, 'with the final three years dependent on service performance achieving preset targets'.
The RMT's general secretary Bob Crow said: "By pulling out three years early First Group have dodged over £800 million due to the UK taxpayer while soaking up £141 million in taxpayer subsidies – that’s the best part of £1 billion that it has cost the British people to underwrite this scandal.
"The idea that on the back of this billion pound rip off that the company should be allowed to put in for a new 15 year deal is simply outrageous."
Reader Comments:
Views expressed in submitted comments are that of the author, and not necessarily shared by Railnews.
Lorentz, London
A case of undiluted arrogance on the part of teh RMT. FGw is operating within the terms of teh contract, something which RMT members would do well to remember.
I call for a ban on the RMT - it is a shambolic trades organisation.
Billy Ghanjit, Paisley, UK
First group are a business essentially. They operate to make money. Why do so many people blame them for entering in to an agreed contract with the government? Surely it was the best deal available at the time, otherwise another commercial company would be operating the franchise.
The government should be shouldering the blame as much as firstgroup because they negotiated the terms of the contract.
Steve Alston, Crewe
Maybe the loss of a few key franchises will make them sit up and realise that acting responsibly during a franchise is key to retaining them. Sacking frontline staff, who have exposed their cornercutting to safety authorities is one good reason why FirstGroup should only allowed to run village buses in Cornwall.
John Kelvin, Oxford
Persuade Chiltern Railways to take it over. Then we might well get the sort of thing that "Jack99" suggests, but applied to the lines out of Paddington as well. "Great Western, Thames and Chiltern Railways"
James Pritchard, Southampton
It'd be interesting to hear from other commentators who travel regularly with FGW. I used to live in the West Country at the time of the 'fare strikes' in 2007, and my more recent experience of travelling with FGW is that they have really listened to the complaints and really made improvements. The refurbished HSTs are lovely, and even the regional fleet isn't bad. When I normally have to suffer the "every passenger is a criminal" attitude employed by South West Trains in Southampton, I find that First Group's friendly and pro-active approach makes a huge difference. I also recently travelled with TransPennine and could make similarly positive remarks about their customer service.
So from my experience, I'm very much in favour of First Group at the moment.
Does anyone actually have any time for Bob Crow, anyway?
Ben, London
I don't think first group have done anything wrong it's not like they've thrown their rattle out of their pram like national express.
But the fact remains all commercial companies not just first will be happy to make big profits when times are good and unwilling to take the losses when times are hard, the only way to brake this cycle is to have the railways under state control
jack99, swindon, UK
The sooner Worst Great Western go the better.
Any new 20 year franchise should be on the Chiltern Railways Franchise model and include
1) Redouble track all the route Oxford - Charlbury and Evesham to Norton Jn Worcester and reinstate the branch to Witney.
2) 4 Track Didcot - Wootton Bassett and reopen Grove , Swindon East , Swindon M4 Parkway and Wootton Bassett
3) Include Swindon - Southampton service
4) Include Bristol - Portishead service
5) 4 track the Bristol suburban lines fron Filton to Bedminster
5) Reopen Okehampton - Bere Alston alternative Plymouth route
6) Reopen stations such as Kingerswell , Corsham , Chipping Campden, Devizes Parkway etc
7) Include East West Rail Oxford - Cambridge
This is in addition to Crossrail and electrfication which should go through to Swansea. Plenty of Class 90's and Mark 3 Coaches about which will be a better cheaper solution than the IEP.
jack99 Swindon
Joel Kosminsky, London, Britain
While it's an unlikeable way of escaping an obligation, the next Greater Western operator will pay a premium determined by their revenue forecast. If they expect lower passenger growth than FirstGroup [and pay less], will the Government award the franchise to someone *clearly* not as dynamic [or as lucrative] as FirstGroup? Does any lesser forecast mean another recession or FirstGroup got it wrong?
Windsorian, UK
The GWR franchise should be taken back into public ownership in 2013, and a new franchise not tendered or completed until all the planned up-grade work is complete.
We've seen from the WCML upgrade and the ECML debacle, that TOCs have their snouts in the public trough and scam every penny possible.