UK transport company National Express who won the franchise to run the East Coast railway London to Edinburgh line in August 2007, have announced that they will be handing the franchise back to the government as the recession has damaged it’s business plan to turn around the loss making business.
It will be the second time in three years that a company has had to give up the franchise, the last time saw the demise of GNER in 2007. The current agreement with National Express was due to run until 2015.
While National Express do not expect the termination to affect other rail franchises that it runs, the decision has clearly angered the Transport minister Andrew Adonis, who is not optimistic over the future of the transport company.
Adonis says he will set up a public company to continue running the aborted franchise and warned National Express that the government believes it may have grounds to terminate other franchises held by the company.
“I think given the track record that National Express has demonstrated today, they’ll have some difficulty in getting into this business again,” said Adonis. Now that is rich coming from a minister of this current government.
In response, Ray O’Toole of National Express said he did not understand the statement from Adonis that the company could lose more franchises, National Express has not reneged on any commitments to the government to date, he added “We are not in default of any of our franchise commitments. Services, passengers and staff will be unaffected by what is going on.”
National Express appear to be guilty only of taking on the franchise at the worst time possible, just as the financial crisis broke and they blame the current situation firmly on the recession.
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