The second-class logic of awarding rail franchises

Outlook

No sniggering in the back now please, but yes, the Department for Transport has rather driven a coach and horses through Stagecoach’s hopes of securing a two-year extension of its South West Trains franchise.

While rail only accounts for around 14 per cent of the transport company’s operating profits, and the blow will be softened as revenues from its East Coast franchise come on stream, this will still come as a big disappointment to the company, which had been anticipating a successful conclusion to its negotiations with the Government.

The company’s critics might well be pleased at the outcome, feeling that Stagecoach shouldn’t have been allowed to walk into a contract for a service that sometimes makes them feel as if they might have been better off walking themselves.

However, the breakdown in talks has been caused not by any consideration for the interests of passengers but by a disagreement over money.

That’s the way it works on the railways, where even a successful, profitable, publicly owned franchise ends up being sold off. That franchise was, of course, the aforementioned East Coast Mainline. It seems that while you can change train, the sad service remains the same.