04.10.13
First Great Western extension premium revealed
FirstGroup will only pay £32.5m in premiums to the Government for the extended First Great Western (FGW) franchise announced yesterday, it has been reported.
The figure was left out of the DfT’s official announcement, a move criticised by many in the industry.
The current FGW franchise is due to expire on October 12, and will now run until 2015. Transport secretary Patrick McLoughlin said the deal would provide “real benefits”, with FirstGroup committed to a range of works including the new Reading rail depot and introducing new Intercity Express trains on the route.
The extension is part of the Rail Franchise Strategy set out earlier this year.
Labour condemned the agreed price of the contract. Maria Eagle, shadow transport secretary, said: “Despite First Great Western paying £126m last year, they will only have to return £17m next year because incompetent ministers have negotiated such a poor deal for taxpayers. Together with the equally poor deal that ministers secured to extend Virgin’s West Coast contract, tax-payers will lose out on a staggering £173m in franchise payments next year.
“Instead of lining the pockets of private train operators, that money could have been used to ease the pressure on commuters facing eye-watering annual fare rises of as much as 11%.
“It is a scandal that the only reason for these costly contract extensions is David Cameron’s decision to rig the franchising timetable so that he can carry out a totally unnecessary privatisation of East Coast rail services.”
But FirstGroup’s Tim O’Toole said: “The agreement with the Department for Transport is good news for First Great Western passengers, taxpayers and our shareholders as it provides continuity and consistency, building on the improvements our experienced team has already made over the last franchise period.
“We have seen significant improvements in customer satisfaction and punctuality, and working with the Department for Transport we have delivered additional capacity on the busiest morning peak trains.
“We will work closely with stakeholders and partners along the route to explore further ways to support our local communities. As the UK's largest and most experienced rail operator we remain committed to maintaining a leading position in the market, and look forward to the rail re-franchising programme gathering pace in the coming months.”
Welsh secretary David Jones said: “The assurance of improved services, such as the roll out of wi-fi, will be warmly welcomed.”
Just 48% of passengers thought that FGW provided good value for money, research by Passenger Focus found. Anthony Smith, chief executive of Passenger Focus, said: “We know that, for most passengers, the key thing is that trains keep running, turn up on time, and that they are able to get a seat.
“They will welcome the certainty and stability this extension to the Great Western franchise will bring but may be disappointed that they have to wait longer for the investment that will accompany the longer franchise when it is finally awarded.
“It is important that this short-term extension is used to prepare and deliver a better, more passenger-focused franchise where the passenger voice has been heard and taken into account.”
The unions also spoke out against the deal, and called it “a scandal” that DOR was not considered to run the franchise.
General secretary of the RMT, Bob Crow, said: “This is another twist of the rail franchising racket with a company running one of the worst performing services in the country given a free run to milk this vital inter city line for all it is worth for another two years.”
Manuel Cortes, leader of the TSSA, added: “FGW are being rewarded for failure on a massive scale.”
Tell us what you think – have your say below, or email us directly at [email protected]