Magazine article Public Finance

Rail Franchises in 'Last Chance Saloon'

Magazine article Public Finance

Rail Franchises in 'Last Chance Saloon'

Article excerpt

News that part of the rail network Is to return to the public sector has been greeted as the 'last chance' for rail franchises by one leading transport expert.

Transport Secretary Lord Adonis announced on July 1 that the government Intended to take control of the East Coast Rail service later this year, after franchise holder National Express said It expected to default on the payments It owes to the Department for Transport under Its agreement

The company sought to renegotiate the terms of its contract when It became clear that the revenues from passenger fares would not cover the cost of the £1.4bn fee it had offered to run the franchise until 2015.

Adonis refused to change the terms. 'It Is simply unacceptable to reap the benefits of contracts when times are good, only to walk away from them when times become more challenging/ he said. …

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