In a surprise move, John MacGregor, the Secretary of State for Transport, said during the Second Reading of the Railways Bill that the new track authority, Railtrack, will not, as previously envisaged, remain within BR. Instead, when it starts next April it will be a separate public body, headed by Bob Horton, a BR vice- chairman, and will take over all BR infrastructure and half its 130,000 staff.
If the Government is successful in attracting private companies to run the first seven franchises later that year, BR will be left as a rump whose services will be franchised out gradually over the next decade, which is bound to severely affect staff morale.
The first franchises, which the Government hopes will be set up in 'shadow' form within BR when the Bill becomes law this autumn, include, as expected, three InterCity lines: the east coast main line from King's Cross to Edinburgh and beyond; all the services to the West and Wales out of Paddington; and the Gatwick Express.
InterCity's managing director, Chris Green, said that he was very disappointed the network was not being retained.
Other services earmarked in the first wave are the south-west division of Network SouthEast, which includes lines from Waterloo to Exeter, Weymouth, Windsor and Portsmouth, but not the North Downs line earmarked for closure by Sea Containers, a potential bidder; the London, Tilbury and Southend line; ScotRail; and the insignificant Isle of Wight line which runs old London Tube trains. These seven services generate pounds 760m revenue for BR, a third of its total annual income.
Mr MacGregor said all these lines had attracted private sector interest, mostly from management buy-outs.
Despite private sector pressure, the Government is offering only the train operations for franchise - except on the Isle of Wight - with the track remaining with Railtrack. That has disappointed potential operators such as Philip Snowden, managing director of Badger, which may seek the Paddington InterCity franchise.
Other potential operators, such as Richard Branson's Virgin, are disappointed because those franchises are likely to be offered exclusively to one operator, rather than allowing competition. 'We do not want to run the whole east coast main line,' a Virgin spokesman said.
The future of Railcard concessions and cheap fares such as savers, supersavers and Apex is still in doubt. The Government will force operators to accept disabled Railcard holders but it will be up to operators to decide whether pensioners or young people should still be eligible for Railcards.
Equally, there will be no obligation for Network SouthEast cards, allowing cheap off-peak travel in that region, to be continued after privatisation.
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