Shadow minister accuses FirstGroup of playing the system
THE TRAIN firm which runs services between Plymouth and London has been accused of "gaming" the system without facing a penalty.
Shadow Transport Secretary Maria Eagle pointed to FirstGroup's decision to end its contract for the Great Western line three years early, and so avoiding making an estimated £800million in payments to the Government.
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She highlighted it as a further flaw in the franchise process, which is already facing calls for reform after the West Coast rail line fiasco.
The costly debacle has meant the new Great Western deal, due to start next year, being put on hold pending the outcome of an independent inquiry into contracting arrangements.
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First Great Western has insisted it is meeting the commitment made with government.
Ms Eagle is pressing for the Government review to consider changing the franchise system, arguing the current one had failed to deliver the promised benefits.
And she did not rule this out including putting the running of the railways back into public hands.
One of her criticisms was the so-called "gaming" of the system by operators, without being penalised.
Ms Eagle told The Herald: "Just to remember, the reason why Great Western is coming up now is that First could have run it for another three years had it chosen to do so.
"But they handed it back, in order to avoid making £800million of payments to Government and there doesn't seem to have been any kind of penalty, or debt, for them for doing that.
"That's another aspect of this franchising process and the way it's run which is unsatisfactory from a taxpayers point of view.
"There's been no penalty for gaming the system. I'm not accusing anybody of engaging in unlawful behaviour, or anything like that, but they have been gaming the system, and there's been no penalty for it."
A FirstGroup spokesman said: "We are fulfilling our commitment as agreed with Government.
"We announced in May 2011 that we would not be taking up our option to extend the First Great Western contract for a further three years beyond the initial franchise term to 2013.
"At that time, the Government had announced franchise reform and major investment in the region including the redevelopment of Reading station, re-signalling and electrification of the Great Western Main Line, the Intercity Express Programme and Crossrail.
"With our unique knowledge of the franchise we believe we are best placed to manage these projects and capture the benefits for our customers in the longer term and we will put together a compelling bid.
"We will continue to operate First Great Western until the current franchise ends and deliver for our customers."
Arguing the need for franchise reform, Ms Eagle said: "You have to have a model which enables taxpayers to get best value for money.
"We need to look at how we can do better."
Comment – Page 11
Comments
by trainman_2010
Sunday, October 07 2012, 2:26PM
“and us the tax paying public accuses the government of playing the system. thief's”
by hstmtu4000
Saturday, October 06 2012, 6:20PM
“reference "Even the right wing Adam Smith institute is asking the question "Are the railway franchises on the right track?"
Here the correct link
http://tinyurl.com/9g63w5u”
by hstmtu4000
Saturday, October 06 2012, 11:06AM
“The problem with our railways is not privatisation as such but the way in which the railways were originally privatised leaving a fragmented railway with a high cost base.Also what the current West Coast main line rail franchising disaster has shown is that its virtually impossible to reliably assess the risk factor in a rail franchise 15 years into the future let alone the 10 year option that FGW had.That is why First Group very wisely from their own point of view had a 7 year opt-out clause in the contract leaving the taxpayer short changed by £800milion because most of the "back loaded" franchise premium payments were due in the final 3 years of the FGW rail franchise.That is no sustainable way to run a railway that is largely funded by the taxpayer.
The railway franchise system is "broken" according to one of the architects of the privatisation of the industry in the 1990s.
http://tinyurl.com/9bs2wwj
Even the right wing Adam Smith institute is asking the question "Are the railway franchises on the right track?"
http://tinyurl.com/8hryb32
No wonder their are calls now for re nationalization of the railways.
http://tinyurl.com/8q9gvjo”
by timplymouth
Saturday, October 06 2012, 9:26AM
“It was Labour who designed this franchise with the OPTIONAL 3 year extension. The 3 year extension was based upon predicted growth for the line that never happened (probably because of the old trains and **** route). No sane person would have taken out the extension, it would have guaranteed bankruptcy.
I'm no fan of First Group or the franchise system, but I don't hold it against them for not extending the contract.”