National Express to get £450m subsidy

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The Independent Online

National Express is to receive more than £450m in public subsidies to continue running Central Trains, the rail service covering the Midlands region, for a further two years.

In return, the company, Britain's biggest train operator, will invest just £5m more in passenger benefits and will not have to improve current service levels.

The agreement between National Express and the Strategic Rail Authority, announced yesterday, will take total subsidies for Central Trains to £1.2bn since the franchise was let in 1997. It is also the latest in a series of franchise extensions which have involved huge increases in taxpayers' support for privatised train operators. In previous cases, the increased subsidy has been used to help pay for new train fleets costing hundreds of millions of pounds. But in the case of Central Trains, the money will be spent on new passenger information systems, train washing facilities and staff training.

The two-year extension will run from April 2004 to March 2006. In the first year, Central Trains will receive £221m in subsidies - a £54m increase on the current year. This will rise to £236m in the second year.

Richard Bowker, the chairman of the SRA, said the franchise extension would deliver stability while the West Coast Mainline upgrade was completed and long-term plans for the franchise were developed.

Central Trains is operated for the West Midlands Passenger Transport Executive by National Express and runs commuter services in the East and West Midlands and long-distance services to East Anglia, South Wales, the North of England and the East coast.

Phil White, the chief executive of National Express, said it had added 4,000 seats a day across the network and invested £7m since taking on the franchise.