One of Britain's busiest rail networks was taken over by a French company yesterday which warned of job losses and declared there would be no new trains. CGEA, a subsidiary of the giant General des Eaux, has won the seven-year franchise to run services in the Network SouthCentral area.
The Government greeted the news as "an excellent deal for the taxpayer", while Labour said the sale was "knee deep in dogma and sleaze" and pointed out that the successful bidder was presently under investigation for fraud.
The news emerged as the Save our Railways pressure group announced a fresh challenge to rail privatisation. The High Court action is being taken against Roger Salmon, the rail franchising director, to allow British Railways Board to bid for lines. High Court action by SOR last December succesfully delayed the franchising process.
Mr Salmon's announcement this week that he was leaving his job earlier than expected, was an embarssment to the government. That embarassment was increased further yesterday when it emerged through industry sources that Mr Salmon had told Sir George Young, the Secretary of State for Transport, last December that he wanted to quit.
This will have did little to boost investor confidence, further damaged yesteday when opposition spokeswoman, Clare Short said a Labour government would not allow its transport policy objectives to be "frustrated" because the rail network was no longer in public hands.
Ms Short said Labour's intention to "extend" public ownership could mean a Labour Government acquiring ownership bytaking equity in return for part of the annual subsidy.
More immediate business was however the focus at Network SouthCentralyesterday. Antoine Hurel, the vice-chairman of London and South Coast - the company formed by CGEA to run the network - promised that while there may be redundancies, services would improve.
Mr Hurel said there would be faster and upgraded services between London and Brighton, new off-peak and Sunday trains in south London and improvements in punctuality. The network covers routes out of Victoria, Charing Cross, and London Bridge stations to Kent, and Sussex.
He said the company was "comfortable" with the 600 "slam door" coaches on the route.
Mr Salmon said the rolling stock would last until the end of the franchise and that replacing it would not be economic. The Health and Safety Executive had approved the decision, he said.
Mr Hurel confirmed that the company was likely to reduce job numbers, but said cutting jobs was not a goal in itself and there would be negotiations before decisions were taken. He said the company would invest pounds 10m to improve stations and trains. After applying for pounds 106.28m in state subsidy, CGEA will receive pounds 85.3m in the first year, gradually declining over seven years to pounds 34.6m in 2002-3.
Sir George Young said yesterday's successful bidder was "one of Europe's foremost private rail operators". He said the Network SouthCentral deal was "excellent" for the taxpayer and the travelling public.".Reuse content