Del Boy and the DfT

01 April 2017

(Feature by District Organiser for District 5, Nigel Gibson, as appeared in the April 2017 issue of the ASLEF Journal)

In November 2015 National Express took on the 15 year Essex Thameside franchise, under the brand name c2c, short for Coast to City, after beating Abellio, First Group and MTR through the bidding process. Just 14 months later National Express announced it had sold its shares to Trenitalia, the Italian state railway company, leaving NX without any train operating companies in the UK.

In October 2016, Abellio won the bid to operate the Greater Anglia franchise, ahead of other interested parties, including National Express and First Group. Just months later Abellio announced an agreement to hand over 40% of its shares to the Japanese company Mitsui.

Both announcements were made within a week of each other, and both with the backing of the government through the Department for Transport, but where does that leave the whole debate about transparency and accountability? Both of these franchises operate in my region and I believe we have good industrial relations with the current incumbent so my purpose in writing is not to attack these companies individually but to question the principle of what is being permitted by the UK government.

Neither Trenitalia nor Mitsui has been involved in operating UK rail services and both companies found their way into the market through the back door without being subject to the scrutiny that the full bidding process would have demanded had they been involved originally.

c2cIn all honesty, I really don’t care about those private companies which have spent millions of pounds submitting bids, and lost out on this occasion. They take enough of our money – a private profit made at public expense – out of our industry anyway. What I do believe, though, is that they will get that money back another way.

Yet if you have a bidding process surely the winner should live, or die, by its commitments without recourse to introduce other unaccountable organisations. How can the DfT allow operators to sell their shares in such a manner? And why would the DfT not demand that, if the bidder awarded a franchise no longer wants to provide the services it pledged to run, and be custodians of that franchise, the keys should be returned?

I am not known for being cynical but I do have to question the motivation of, first, those selling their shares and, second, the reason for the government’s Nelsonic ‘blind eye’ approach. I can only come to the conclusion that perhaps the bids were not as robust or as lucrative as the companies had hoped and the opportunity to allow another operator to take it on – and the chance to cash in their chips – was more attractive.

From the DfT perspective surely there is only one answer? The DfT cannot be seen to oversee yet more failings of a flawed privatised system because of the government’s ideological principles. How could they demand the return of the franchise keys when millions of pounds of taxpayers’ – and bidders’ – money had been spent just months before, in theory, if not in practice, to establish a long-term operator of the railway in our region. Wouldn’t it look so much worse, from the perspective of the DfT, if they were to take the keys back, suggesting incompetence on their part. It’s easier to save the blushes and ride the companies’ ‘It’s just a share transfer’ argument.

The question for the travelling public, and trade unions, is how can the DfT justify such a blatant slap in the face from a government hell bent on ensuring that private companies make more money off the backs of fare-paying passengers and the workers who provide what should be a public service? Where does it leave the men and women employed by these new companies and what can they expect in the future? How many other external organisations will see an opportunity to make a few quick pounds – without the proper scrutiny of a proper bid – before selling the shares when the next interested party comes knocking at the door?

All this leaves a bad taste in the mouth, and worse in an industry where scepticism amongst workers is already high, not least because we can see other international – yet nationalised – operators making capital from our railways. In my view, this just shows the contempt this government, and the DfT, have for railway workers and those members of the travelling public who use the services.

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