FirstGroup may spend pounds 1bn to replace GWR high-speed trains

FIRSTGROUP, one of the two rail companies involved in the Paddington crash, may replace its entire fleet of high-speed trains on the Great Western line in a move which analysts believe could cost pounds 500m to pounds 1bn.

The offer is likely to form part of FirstGroup's case for being granted an extension of its 10-year franchise to operate the Great Western service which expires in 2006.

Moir Lockhead, chief executive of FirstGroup, refused to be drawn on the level of investment that would be entailed or how long an extension it would be pressing for. But he said: "It must be the most attractive proposition because the existing high-speed trains are getting old."

He was speaking as FirstGroup defended a 21 per cent increase in first- half profits to pounds 55m, coming so soon after the Paddington disaster. The increase includes a 28 per cent rise in operating profits from its rail division to pounds 17.8m.

Mr Moirhead said the results had been overshadowed by Paddington. But he added: "We see no conflict between our company making profits and generating revenues and the objective of creating a newer and safer railway."

He said that as part of FirstGroup's existing investment programme it planned to spend pounds 210m on new trains and station improvements for its Great Western and North Western franchises in the next three years - double the profits from its rail division and 12-times the interim dividend paid to shareholders.

FirstGroup is replacing 70 train carriages on Great Western and another 70 on North Western at a cost of pounds 140m. But Mr Moirhead said that as part of the franchise renegotiations with Sir Alastair Morton's Strategic Rail Authority, it would offer proposals to replace all 86 high-speed trains on the route.

The company is also considering buying additional rolling stock for its North Western and Great Eastern franchises, both of which expire in 2004.

Mr Moirhead rejected criticisms of its decision to bring carriages damaged in the earlier Southall crash back into use on Great Western. He said any of the rear carriages involved in the Paddington crash would only be brought back into service once they had undergone a "compete reconstruction process" at the manufacturer's.

Great Western is operating at 85 per cent of its capacity before the Paddington crash and calculates that passenger numbers are down 7 per cent on those services it is running. FirstGroup said any financial losses would be covered by insurance, since the driver of its train, who was killed in the crash, was proceeding under a green light.

But Mr Moirhead conceded that the privatised rail industry had a major task on its hands to regain public confidence. "It has been hit and we will have to work hard to reassure the public that there is no inconsistency between companies like us making profits and a safe railway system."

The results covering the six- month period up to 30 September include a two-month contribution from its new North American division, created following the acquisition of the American school bus company Ryder.

Tony Osbaldiston, finance director, said that the United States was already running ahead of expectations, having contributed pounds 2.7m of profit in the short period since completion.

The US accounts for about 20 per cent of FirstGroup's pounds 2bn turnover but Mr Osbaldiston said that if another big deal came up at the right price, FirstGroup could fund it.

Arts and Entertainment
Gregg Wallace in Summer's Supermarket Secrets
tv All of this year's 15 contestants have now been named
Arts and Entertainment
Inside the gallery at Frederick Bremer School in Walthamstow
tvSimon Usborne goes behind the scenes to watch the latest series
Life and Style
A picture taken on January 12, 2011 shows sex shops at the Paris district of Pigalle.
newsThe industry's trade body issued the moratorium on Friday
News
Winchester College Football (universally known as Winkies) is designed to make athletic skill all but irrelevant
Life...arcane public school games explained
PROMOTED VIDEO
Arts and Entertainment
Could we see Iain back in the Bake Off tent next week?
tv Contestant teased Newsnight viewers on potential reappearance
Life and Style
Silvia says of her famous creation: 'I never stopped wearing it. Because I like to wear things when they are off the radar'
fashionThe fashion house celebrated fifteen years of the punchy pouch with a weighty tome
News
i100(and it's got nothing to do with the Great British Bake Off)
News
Angelina Jolie with her father Jon Voight
peopleAsked whether he was upset not to be invited, he responded by saying he was busy with the Emmy Awards
News
Bill Kerr has died aged 92
peopleBill Kerr appeared in Hancock’s Half Hour and later worked alongside Spike Milligan and Peter Sellers
News
news It's not just the world that's a mess at the moment...
Sport
footballPremiership preview: All the talking points ahead of this weekend's matches
News
Keira Knightley poses topless for a special September The Photographer's issue of Interview Magazine, out now
people
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Voices
The Ukip leader has consistently refused to be drawn on where he would mount an attempt to secure a parliamentary seat
voicesNigel Farage: Those who predicted we would lose momentum heading into the 2015 election are going to have to think again
Arts and Entertainment
Cara Delevingne made her acting debut in Anna Karenina in 2012
film Cara Delevingne 'in talks' to star in Zoolander sequel
News
i100
Sport
Mario Balotelli pictured in his Liverpool shirt for the first time
football
Life and Style
tech
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Data Scientist (SQL,Data mining, data modelling, PHD, AI)

£50000 - £80000 per annum + benefits+bonus+package: Harrington Starr: Data Sci...

SAS Business Analyst - Credit Risk - Retail Banking

£450 - £500 per day: Orgtel: SAS Business Analyst, London, Banking, Credit Ris...

Project Manager - Pensions

£32000 - £38000 Per Annum Bonus, Life Insurance + Other Benefits: Clearwater P...

KYC Analyst, Birmingham - £200-£250 p/d

£200 - £250 per day + competitive: Orgtel: KYC Analyst, Key Banking Client, Bi...

Day In a Page

Ukraine crisis: The phoney war is over as Russian troops and armour pour across the border

The phoney war is over

Russian troops and armour pour into Ukraine
Potatoes could be off the menu as crop pests threaten UK

Potatoes could be off the menu as crop pests threaten UK

The world’s entire food system is under attack - and Britain is most at risk, according to a new study
Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

Seoul's plastic surgery industry is booming thanks to the popularity of the K-Pop look
From Mozart to Orson Welles: Creative geniuses who peaked too soon

Creative geniuses who peaked too soon

After the death of Sandy Wilson, 90, who wrote his only hit musical in his twenties, John Walsh wonders what it's like to peak too soon and go on to live a life more ordinary
Caught in the crossfire of a cyber Cold War

Caught in the crossfire of a cyber Cold War

Fears are mounting that Vladimir Putin has instructed hackers to target banks like JP Morgan
Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years

Salomé: A head for seduction

Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years. Now audiences can meet the Biblical femme fatale in two new stage and screen projects
From Bram Stoker to Stanley Kubrick, the British Library's latest exhibition celebrates all things Gothic

British Library celebrates all things Gothic

Forthcoming exhibition Terror and Wonder: The Gothic Imagination will be the UK's largest ever celebration of Gothic literature
The Hard Rock Café's owners are embroiled in a bitter legal dispute - but is the restaurant chain worth fighting for?

Is the Hard Rock Café worth fighting for?

The restaurant chain's owners are currently embroiled in a bitter legal dispute
Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival

In search of Caribbean soul food

Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival
11 best face powders

11 best face powders

Sweep away shiny skin with our pick of the best pressed and loose powder bases
England vs Norway: Roy Hodgson's hands tied by exploding top flight

Roy Hodgson's hands tied by exploding top flight

Lack of Englishmen at leading Premier League clubs leaves manager hamstrung
Angel Di Maria and Cristiano Ronaldo: A tale of two Manchester United No 7s

Di Maria and Ronaldo: A tale of two Manchester United No 7s

They both inherited the iconic shirt at Old Trafford, but the £59.7m new boy is joining a club in a very different state
Israel-Gaza conflict: No victory for Israel despite weeks of death and devastation

Robert Fisk: No victory for Israel despite weeks of devastation

Palestinians have won: they are still in Gaza, and Hamas is still there
Mary Beard writes character reference for Twitter troll who called her a 'slut'

Unlikely friends: Mary Beard and the troll who called her a ‘filthy old slut’

The Cambridge University classicist even wrote the student a character reference
America’s new apartheid: Prosperous white districts are choosing to break away from black cities and go it alone

America’s new apartheid

Prosperous white districts are choosing to break away from black cities and go it alone