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Rail firm pays for disruption

Randeep Ramesh
Sunday 22 June 1997 23:02 BST
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The private train operator that runs Britain's fastest railway has seen its cash surpluses wiped out by rising costs and a series of unforeseen disruptions, according to leaked documents obtained by The Independent.

Great North Eastern Railway, owned by freight giant Sea Containers, runs the flagship East Coast route which links London to Scotland. Despite recording a 7 per cent increase in passenger numbers last year, recent performance has been "poor due to security alerts ... and trends for cost to run above budget".

Last year the company earned pounds 258m from ticket sales and claimed in January to be "profitable". But according to its internal "core brief" for April this year, the "overall effect [of the delays] is to wipe out the income and bottom line surpluses that have been built up over the first three periods". The memo continues: "We have now lost our cushion and will be very vulnerable to any further disruptions or unforeseen events affecting our finances."

Although considered one of the most potentially profitable lines, GNER's passenger numbers dropped earlier this year after major signalling failure closed parts of the network for a day and coded bomb warnings shut down 70 miles of track.

Chris Garnett, the company's chief executive, said: "It was a four-week hiccup. Passenger numbers are back up and we are on target to make a profit again."

He said the delays showed that if passengers believed the system was "unreliable", then "they just go to the airlines and we then have to win them back".

Also hit in April were the number of minutes that trains were delayed. The total "fleet" delay was 4,123 minutes - up by 1,015 minutes on the last period. The company briefing blames the large rise on "the knock- on effects of the various disruptions on station workings..."

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