Rail companies face heavy losses

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Five of the newly-privatised train companies will make heavy losses during their franchise terms, and five others are likely to be in serious financial difficulty, according to a report out yesterday.

The Franchising Director will need substantial additional funds from the new government to keep train services running on the cash-troubled lines, the report said.

Keith Bill, national secretary of the pressure groups Save Our Railways, which commissioned the report said: "This report will shock most people in the rail industry, the City and of course rail passengers in many parts of Britain."

"The Prospects for the Franchised Railway" was compiled by Tim Powell, a former transport studies director at accountants and management consultants Coopers & Lybrand - the company which advised the Office of Passenger Rail Franchising on privatisation.