FirstGroup to press for control over track

FirstGroup, the bus and train operator, is to urge the Government to give it control over the rail network in Scotland and south-west England as a way of improving the reliability of its passenger services.

FirstGroup, the bus and train operator, is to urge the Government to give it control over the rail network in Scotland and south-west England as a way of improving the reliability of its passenger services.

The idea of vertical integration of the railways was sidelined in the recent review of the industry published over the summer by the Transport Secretary, Alistair Darling.

However, Moir Lockhead, the chief executive of First, said it intended to press the case again, arguing that the ability to operate track and trains would make for smoother running of services on parts of the network where there is one dominant operator. "Network Rail would remain the landlord but over time one organisation could run the trains and look after the track in areas where the cross-flow of traffic is small," Mr Lockhead said.

First took over the ScotRail franchise in October and now runs more than 90 per cent of services north of the border. It is also the dominant operator in the South-west through its First Great Western franchise which runs inter-city services from Paddington in London to the West Country.

Mr Lockhead also said he was increasingly optimistic of winning the enlarged Greater Western franchise which the Government intends to award in 2006. In previous franchise battles the incumbent operator has generally been unsuccessful in retaining the contract, but Mr Lockhead said: "The new regime is talking much more about track record and past performance than they did before and that is a good thing for us."

First said that since it had taken on Great Western in 1996 the number of trains in operation had increased 35 per cent and the £50m annual subsidy would have been turned into a £10m payment to the Government by 2006.

A one-third increase in profits from First's rail division, which also includes the TransPennine and First North Western franchises, helped the group to increase underlying pre-tax profits by 9 per cent to £62m for the first half and lift the dividend 10 per cent. Rail profits jumped from £22m to £34m on turnover up by £51m to £446m due to increased subsidies and passenger revenues.

Mr Lockhead said that the re-election of George Bush was unlikely to have any noticeable effect on First's business in North America, where it is the second biggest operator of yellow school buses.