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Thursday, May 23, 2024

East Coast most efficiently run franchise

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The East Coast franchise is the most efficiently run in the UK in terms of its reliance on taxpayer funding, an ORR report has concluded.

Out of the franchises that make net payments to the government, East Coast, which has been state run since November 2009, requires just 1 per cent of government funding once infrastructure costs have been taken into account. An extremely low figure when compared to the Virgin-operated West Coast franchise with its requirement for 13 per cent government funding.

Of the other nine franchises that make net payments to the government, the reliance on state funding ranges from 3 per cent to 36 per cent.

In March, Transport Secretary Patrick McLoughlin announced that the East Coast route would return to private control by 2015 and the figures are likely to fuel the debate as to whether Britain’s railways should be operated by the state.

The report is the most comprehensive assessment of the rail industry since it was privatised and it looked at the funding of passenger services along with the cost to Network Rail of maintaining the infrastructure.

A number of franchises, specifically long-distance operators and those that that run commuter services in the south east, are able to generate enough profit to make premium payments to the government. This is in direct contrast to unprofitable franchises that serve the English regions, Scotland and Wales in addition to the significant cost of maintaining and upgrading the rail infrastructure. This results in taxpayers contributing £4 billion net to the annual £11.6 billion needed to run the railways.


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