Government orders rail fraud inquiry

Allegations threaten privatisation plans

The Government yesterday ordered rail operators to conduct an urgent fraud inquiry after the first day of privately run passenger services was overshadowed by allegations of ticketing irregularities.

The investigation into ticket fraud allegations, which stopped the sale of one of the three first lines - London Tilbury and Southend (LTS) - threatens to disrupt the timetable for the entire privatisation programme.

The Government's celebrations at seeing private operators take over two lines, South West Trains and Great Western, were muted in the face of the delay to the sale of LTS which has led to reassessment of procedures.

Sir George Young, the Secretary of State for Transport, said that "procedures were robust" because the fraud appears to have been quickly uncovered. However, he has asked the Association of Train Operating Companies to re-examine its procedures to "see whether there are lessons to be learned".

Labour last night demanded a police inquiry. Clare Short, the shadow transport secretary, said: "You change from a public service to a profit- seeking motive and you get, not just the drive for profits, but criminal behaviour."

Any fundamental problems with the privatisation process uncovered by these inquiries are bound to lead to further hold-ups in the controversial and much-delayed franchising programme, designed to put rail services into private hands for the first time since 1948.

Investigations into the ticketing fraud are also being carried out by British Rail and the rail regulator, John Swift.

Already, Colin Andrews, the joint commercial director of LTS, the BR subsidiary, and of its successor, Enterprise Rail, which had taken over the LTS line, has resigned and industry sources suggest that other heads may fall. The alleged fraud, estimated at pounds 45,000, involved taking combined rail and Tube Travelcard tickets issued at Fenchurch Street to be sold at another station, Upminster, because LTS gets a higher proportion of the revenue from tickets at Fenchurch Street.

About half the 25 train operating companies share revenue for ticket sales with London Transport, and the investigations will consider whether other companies have failed to give London Underground its proper share of ticket revenue.

Allocation of revenue between the operating companies is carried out by Atoc and is a highly complex operation which is so far untested because all the companies were, until yesterday, owned by BR.

Brian Wilson, Labour's transport spokesman, welcomed the investigations but said the police should be called in. "There was a clear victim for this alleged fraud and it was London Underground. The police must examine the books to see whether criminal offences were involved."

Any hint of fraud at other franchises will be highly embarrassing to ministers, who only last week asked Roger Salmon, the franchising director, to speed up privatisation to have all franchises in the private sector by next spring, the likeliest time for a general election.

Sir George refused to say whether the franchising process for the LTS line would be reopened, but it is clear that there will now be serious doubts over the future of the management buy-out team.

The other two lines to be sold off operated with few hitches, although Great Western's headquarters, Swindon, was virtually cut off by engineering works for most of the day and passengers had to use buses.

Stagecoach, which took over South West Trains, promised to bring in new feeder bus services to two stations, Winchester and Liphook, and said its passengers' charter would be more onerous than that of its predecessor, by improving punctuality and reliability in February 1997. Great Western promised new services.

The sell-off, page 3

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Telesales Executive - OTE £25,000

£13000 - £25000 per annum: Recruitment Genius: Would you like to be part of a ...

Recruitment Genius: 1st Line Technical Support Engineer

£19000 - £23000 per annum: Recruitment Genius: This IT and Telecoms company ar...

Recruitment Genius: Assistant Manager - Visitor Fundraising

£23000 per annum: Recruitment Genius: The Visitor Fundraising Team is responsi...

Recruitment Genius: Developer

£30000 - £35000 per annum: Recruitment Genius: This is an opportunity to join ...

Day In a Page

The Silk Roads that trace civilisation: Long before the West rose to power, Asian pathways were connecting peoples and places

The Silk Roads that trace civilisation

Long before the West rose to power, Asian pathways were connecting peoples and places
House of Lords: Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled

The honours that shame Britain

Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled
When it comes to street harassment, we need to talk about race

'When it comes to street harassment, we need to talk about race'

Why are black men living the stereotypes and why are we letting them get away with it?
International Tap Festival: Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic

International Tap Festival comes to the UK

Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic
War with Isis: Is Turkey's buffer zone in Syria a matter of self-defence – or just anti-Kurd?

Turkey's buffer zone in Syria: self-defence – or just anti-Kurd?

Ankara accused of exacerbating racial division by allowing Turkmen minority to cross the border
Doris Lessing: Acclaimed novelist was kept under MI5 observation for 18 years, newly released papers show

'A subversive brothel keeper and Communist'

Acclaimed novelist Doris Lessing was kept under MI5 observation for 18 years, newly released papers show
Big Blue Live: BBC's Springwatch offshoot swaps back gardens for California's Monterey Bay

BBC heads to the Californian coast

The Big Blue Live crew is preparing for the first of three episodes on Sunday night, filming from boats, planes and an aquarium studio
Austin Bidwell: The Victorian fraudster who shook the Bank of England with the most daring forgery the world had known

Victorian fraudster who shook the Bank of England

Conman Austin Bidwell. was a heartless cad who carried out the most daring forgery the world had known
Car hacking scandal: Security designed to stop thieves hot-wiring almost every modern motor has been cracked

Car hacking scandal

Security designed to stop thieves hot-wiring almost every modern motor has been cracked
10 best placemats

Take your seat: 10 best placemats

Protect your table and dine in style with a bold new accessory
Ashes 2015: Alastair Cook not the only one to be caught in The Oval mindwarp

Cook not the only one to be caught in The Oval mindwarp

Aussie skipper Michael Clarke was lured into believing that what we witnessed at Edgbaston and Trent Bridge would continue in London, says Kevin Garside
Can Rafael Benitez get the best out of Gareth Bale at Real Madrid?

Can Benitez get the best out of Bale?

Back at the club he watched as a boy, the pressure is on Benitez to find a winning blend from Real's multiple talents. As La Liga begins, Pete Jenson asks if it will be enough to stop Barcelona
Athletics World Championships 2015: Beijing witnesses new stage in the Jessica Ennis-Hill and Katarina Johnson-Thompson heptathlon rivalry

Beijing witnesses new stage in the Jess and Kat rivalry

The last time the two British heptathletes competed, Ennis-Hill was on the way to Olympic gold and Johnson-Thompson was just a promising teenager. But a lot has happened in the following three years
Jeremy Corbyn: Joining a shrewd operator desperate for power as he visits the North East

Jeremy Corbyn interview: A shrewd operator desperate for power

His radical anti-austerity agenda has caught the imagination of the left and politically disaffected and set a staid Labour leadership election alight
Isis executes Palmyra antiquities chief: Defender of ancient city's past was killed for protecting its future

Isis executes Palmyra antiquities chief

Robert Fisk on the defender of the ancient city's past who was killed for protecting its future