HS2

05.11.18

Northern Rail and German owner in crisis talks with government over risk of £282m bailout

Northern Rail are locked in crisis talks with the government along with its owner, Germany’s nationalised train operator Deutsche Bahn, as massive levels of disruption cripple the rail franchise’s finances.

The Telegraph revealed that “catastrophic mismanagement” has led to Arriva, the parent company of Northern Rail, and its German owner becoming locked into crisis talks with the DfT, with the taxpayer bail-out soaring to £282m.

The news comes on the 25th anniversary of the passing of the Act bringing in rail privatisation in Britain, and the rail union the RMT has called for the Northern franchise to be returned to public ownership.

The franchise has suffered this year from a massively disruptive May timetable introduction, which it blamed on late-running electrification work, as well a bitter dispute with the RMT about on-train staff.

The Daily Telegraph claim that Deutsche Bahn is aiming to renegotiate the subsidy profile included in its contract.

Arriva’s terms state that the amount of subsidy is supposed to fall each year, but the timetable chaos and strikes have seen passenger numbers fall and the subsidy rise to £282m.

A spokesperson for Northern said: "We are delivering on all of our commitments and are investing more than £600m to transform local rail in the North — with new trains, better stations, more services and faster journeys for our customers.

"This is the biggest investment into rail in the North in a generation. But the franchise has faced a number of exceptional circumstances, notably the ongoing, late delivery of infrastructure upgrades.

"These delays were out of our control and have impacted growth in passenger numbers.

"As is standard practice, we are in constant dialogue with the Department for Transport about how to improve journeys for customers in the North.” 

RMT’s general secretary Mike Cash said that Arriva Rail North “is a basket case rail franchise sucking up well over a quarter of a billion pounds a year in public bail-outs while wrecking service standards, ripping up the safety rule book and threatening to throw the guards off over half their trains.”

He said: “This scandal needs to end immediately and that means the government taking immediate action to bring the Northern routes into direct public ownership and control with the services run on the basis of safety, security and access and not private profit.

“That means a guard on every train and proper staffing at station level as well.”

Cash said the news mirrored the Virgin collapse on the East Coast Main Line earlier in the year, and called the 25-year-old Act “the Great British Rail Rip-Off.”

RMT demonstrated outside Parliament in line with the quarter century anniversary, and has also announced strike action to take place on Northern lines on every Saturday until the end of the year.

Complaints hit a six-year high for UK railway during the May timetable chaos, according to the ORR who blasted the transport secretary in a report in September, claiming that no one took charge.

 Image credit - Peter Byrne/PA Wire/PA Images

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