National Express told to shed Scottish coach group

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The Independent Online
Margaret Beckett, the President of the Board of Trade, has a reputation for championing competition over commercial interests. But, as Randeep Ramesh reveals, yesterday's report by the Monopolies and Mergers Commission (MMC) into National Express' rail and coach empire saw her instincts snubbed.

National Express Group (NEG) would have to sell off its pounds 12m Scottish Citylink operation, which provides long-distance coach services north of the border, Mrs Beckett said. The company runs ScotRail, which operates train services in Scotland.

The decision followed publication by the MMC's report, which concluded there were nine routes where subsidiaries of National Express operated coach services that overlapped with ScotRail train services and that might be expected to lead to "an increase in coach fares compared with current levels".

The MMC also decided that National Express owning Central Trains, which ferries passengers around the West Midlands, and operating local bus services in the area did "not operate against the public interest".

The MMC report vindicates the officials at the Office of Fair Trading (OFT). Just three weeks after taking office, Mrs Beckett flexed her regulatory muscles by overruling John Bridgeman, the director-general of Fair Trading, and referring the two National Express acquisitions.

Mr Bridgeman advised that neither the takeover of ScotRail, the train company that runs services north of the border, nor that of Central, a franchise which ferries passengers around the West Midlands, should be sent to the MMC.

The OFT said that the ScotRail acquisition should be referred only if National Express did not divest itself of its coach company Scottish Citylink - a move which the panel of experts at the MMC endorsed.

NEG will not lose any sleep over the decision. Last year the group made a record profit of pounds 62m on a turnover of pounds 480m. Scottish Citylink contributed a pre-tax profit of pounds 1m on sales of just pounds 12m. ScotRail received nearly pounds 300m from the Treasury this year to run services.

NEG executives were pleased with the decision concerning Central Trains. "The Government clearly recognises the benefits that we are achieving from an integrated transport system," said Colin Childs, NEG's finance director.

Mr Childs said he was "disappointed" by the MMC's decision on Scottish Citylink. "We would have preferred some sort of behavioural undertakings," he added.

Citylink will now be sold to a buyer within the next six months and it will be allowed to increase its scheduled coach services within Scotland for the remainder of the ScotRail franchise agreement.