Go-Ahead to seek rail deal renewals

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The Independent Online
GO-AHEAD, the public transport group, is to seek an early renegotiation of both its rail franchises in the wake of the Government's offer made at the National Rail Summit. The company said yesterday it was drawing up bids for Thames Trains and Thameslink, which both expire in April 2004.

The Government announced on Thursday that it was putting the rail network up for auction by allowing a limited number of franchises to be extended in exchange for a package of substantial passenger benefits.

Chris Moyes, Go-Ahead commercial director, said it believed it had a fair chance despite the franchises' current performance. The latest official figures awarded Thames a D grade and Thameslink a C.

He accepted that Thames's current performance had to be improved and said the Thameslink bid was confused by the pounds 600m Thameslink 2000 upgrade project, which is now not due to be completed until 2006.

Thameslink is the fastest-growing railway, with passenger numbers up 11.6 per cent in its first year of privatisation.

Analysts believe the Government may decide it could get a better deal by throwing the franchise open to the market because of the benefits of the infrastructure upgrade. But Mr Moyes said that by 2004 the heavy work would have started to cause delays and choke off demand. He said Go-Ahead would offer new rolling stock for Thameslink to cope with the extra demand and on Thames to better cater for its long-distance routes. But he added: "We are not daft enough to think we could negotiate a longer deal on Thames while its performance is as it is."

Almost 17 per cent of trains were late last year on the network, which runs from London to the Thames Valley and the West Midlands.

The group yesterday reported a pre-tax profit of pounds 21.4m for the six months to 2 January, a 21 per cent rise. The train businesses made an operating profit of pounds 7.9m, a 39 per cent increase on pounds 5.7m a year ago and a 6.5 per cent return on turnover. The interim dividend will rise to 3.5p from 3p.