Rail bosses cash in on privatised gravy train

RAILWAY privatisation produced a new set of millionaires yesterday after Britain's biggest bus company got the green light to purchase one of the nation's high-speed train services.

Seven rail executives will share profits of more than pounds 15m - a rise on average of 7,000 per cent on their initial investment - after the buy- up by the bus giant FirstGroup of Great Western Holdings, which runs services from London to Wales and the South-west and trains in the North-west.

The deal angered local passenger groups and rail campaigners who point out nearly 20 per cent of trains run late on the company's flagship Great Western service.

John O'Brien, the franchising director, approved the deal but only after he secured a "pounds 75m package of benefits" for users of the new FirstGroup train company. On Great Western, pounds 32m worth of new trains will be ordered to be in service by June 2002, and all season-ticketholders will get a week's free travel.

In addition, there will be fines for trains running late - pounds 250 for 20 minutes late, pounds 500 for 30 minutes late and pounds 1,000 if cancelled altogether. However, Trevor Smallwood, FirstGroup's chairman, said this would only cost the company pounds 1m.

On North Western - a commuter network centred on Liverpool - pounds 1m will be spent on additional passenger benefits and on Great Eastern - already owned by FirstGroup - all 96 slam-door trains will be phased out by the end of 2002.

Despite the extra cost for the deal, FirstGroup say it is a good investment. The two rail companies are receiving more than pounds 200m in public subsidy this year and Mr Smallwood said Great Western Holdings would make "not less than pounds 25m" profit.

John Prescott, the Deputy Prime Minister, was "not totally happy" with the arrangement. But the last government's weak regulatory powers left Mr Prescott with little alternative. "I don't have the power to block the deal," he admitted.

With a White Paper looming this summer, the Deputy Prime Minister is sure to be add to his legislative armoury. In statement, he said: "Whilst I welcome these improvements, within the constraints of the current law, it is clear that the passenger and the taxpayer are still not getting the best deal in the privatised railway. I am determined to start putting that right in my forthcoming White Paper."

Despite the gains for passengers, the man with most to make from his two-year trip on the gravy train is Brian Scott. Starting his career with British Rail as a ticket clerk in 1958, he rose quickly to head up the Great Western InterCity service.

A blunt-speaking patriarch, in 1993 he told the then secretary of state for transport John MacGregor that "as an experienced professional railway business manager, I would not be putting my money into a train-operating company."

Fortunately he did. His pounds 37,500 investment in 1996 has now risen by nearly 10,000 per cent to more than pounds 3.7m. Others also benefited. The average employee - which includes ticket collectors and train drivers - invested pounds 200 and will see windfalls of pounds 30,000.

News
David Beckham
peopleFootballer joins No campaign
Sport
Angel Di Maria
Football
News
Piers Morgan tells Scots they might not have to suffer living on the same island as him if they vote ‘No’ to Scottish Independence
news
News
i100Exclusive interview with the British analyst who helped expose Bashar al-Assad's use of Sarin gas
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
Sport
BoxingVideo: The incident happened in the very same ring as Tyson-Holyfield II 17 years ago
Life and Style
Jourdan Dunn gave TopShop’s Unique show some added glamour at London Fashion Week
fashion week
News
Groundskeeper Willie has backed Scottish independence in a new video
people
Arts and Entertainment
The Doctor poses the question of whether we are every truly alone in 'Listen'
tvReview: Possibly Steven Moffat's most terrifying episode to date
News
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs General

English Teacher

£22800 - £33600 per annum: Randstad Education Manchester Secondary: Experience...

Higher Level Teaching Assistants in Bradford and West Leeds

£65 - £75 per day: Randstad Education Leeds: We are currently seeking Higher L...

EYP

Negotiable: Randstad Education Manchester: Job opportunity for an Early years ...

QA Manual Tester - Agile

£300 - £350 Per Day: Clearwater People Solutions Ltd: Our client based in Cent...

Day In a Page

These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week
The fall of Rome? Cash-strapped Italy accused of selling its soul to the highest bidder

The fall of Rome?

Italy's fears that corporate-sponsored restoration projects will lead to the Disneyfication of its cultural heritage
Glasgow girl made good

Glasgow girl made good

Kelly Macdonald was a waitress when she made Trainspotting. Now she’s taking Manhattan
Sequins ahoy as Strictly Come Dancing takes to the floor once more

Sequins ahoy as Strictly takes to the floor once more

Judy Murray, Frankie Bridge and co paired with dance partners
Wearable trainers and other sporty looks

Wearable trainers and other sporty looks

Alexander Wang pumps it up at New York Fashion Week
The landscape of my imagination

The landscape of my imagination

Author Kate Mosse on the place that taught her to tell stories