[A-List] UK legitimation crisis: railways fiasco

[Michael Keaney]

And how much can't we afford to give the firefighters?

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Ailing Connex is given £58m handout by state
By Barrie Clement, Transport Editor
The Independent, 12 December 2002

Rail chiefs gave one of Britain's biggest train operators a £58m handout
yesterday from taxpayers, but cut its franchise by five years.

The move to bail out Connex, which runs commuter services in the South-east,
will be seen as a further step in the "creeping re-nationalisation" of the
network.

Connex South Eastern, whose franchise will now finish at the end of 2006,
will add £11m of its own equity to the government subsidy, which will come
via the Strategic Rail Authority (SRA). The news follows revelations in The
Independent that Connex, along with five other operators in the South-east,
are to raise peak-time fares by 2.5 per cent.

An SRA spokesman said Connex had been losing money and was expected to
continue to do so. "We wanted to have a degree of stability and that's why
we have announced the extra subsidy," he said.

In the wake of yesterday's announcement, critics will argue that the idea of
a privatised rail system is increasingly counterfeit. The infrastructure has
been been taken over by the state-backed Network Rail and all major new
projects are being organised by the SRA.

Nick Newton, the SRA's chief operating officer, said the package had short
and long-term benefits for passengers. "It secures the continuation of
Connex's efforts to improve punctuality, ensures delivery of the programme
to replace slam-door trains and opens the way for an expanded Kent franchise
from 2007 incorporating proposed high-speed services," he said.

It is expected that the Kent franchise will incorporate the domestic
services that will run on the Channel Tunnel high-speed rail link when it
opens in 2007. A Connex spokeswoman said the firm looked forward to bidding
for the enlarged licence.

The Liberal Democrat transport spokesman, Don Foster, said it was "deeply
disturbing" that taxpayers' money had to be used to prop up an "ailing and
failing" company. He said Connex should be placed into a "management
contract" under the SRA which would give taxpayers greater control over
their investment, "rather than seeing cash disappear into a black hole".

He added: "It is vital that the new franchise is sorted out as quickly as
possible."

Mike Hewitson, secretary of the southern England sector of the Rail
Passengers Council, said: "We have been calling for more investment in Kent
train services, although this was not quite the way we thought we would get
it. If this leads to improved services, then it's a good thing."