pounds 2.8bn subsidy for Nat Express

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The coach group National Express, which has emerged from rail privatisation as Britain's biggest passenger train operator, will receive almost pounds 2.8bn in subsidies - a third of all the taxpayers' money being pumped into the network.

The scale of the support puts National Express on a par with British Leyland, British Coal and British Steel, all recipients of huge state handouts in the 1970s and 1980s.

A detailed breakdown of the subsidies shows that National Express will get pounds 2.76bn over the next seven to 15 years to run the five passenger franchises it has taken over.

By contrast, Richard Branson's Virgin Group, which won the Cross Country and West Coast Mainline franchises, will make net payments to the Government of pounds 353m over the 15-year life of the two franchises.

National Express will receive pounds 1.662bn in support to operate Scotrail for the next seven years, a further pounds 1.086bn for Central Trains and pounds 220m in subsidy for North London Trains.

But it will make payments of pounds 207m to the rail franchising director over the life of its franchises to operate the Gatwick Express and Midland Mainline, which runs InterCity services to the Midlands and the North.

The next biggest recipient of state support will be Merseyside-based bus group MTL Trust Holdings, which will get pounds 1.7bn to run the heavily loss-making Merseyrail and the Regional Railways North East.

The French group Generale des Eaux, which operates under the name of Connex, is getting pounds 901m to run Network South Central and South Eastern.

Prism, which was also set up by a group of bus operators, will get pounds 903m for the four franchises it has won, including the London-Tilbury-Southend Line, once dubbed the Misery Line.

In total, pounds 8.2bn will be paid out in subsidies to private rail operators between now and 2012 to enable them to pay Railtrack's access charges. National Express will receive 34 per cent of this. In the coming year it will account for 28 per cent of all subsidies, rising to a peak of 45 per cent in 2003-2004.

Although National Express won the biggest number of franchises, it will only rank third in market share, based on passenger revenues, behind Connex and Virgin.

Last year the rail network took pounds 2.7bn in fares. National Express franchises will account for just over 14 per cent of fare income while Connex will get 16 per cent.

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