05.02.13
Franchising mess ‘dented confidence’
The incoming chief executive of Stagecoach, Martin Griffiths, told MPs on the transport select committee that the franchising debacle had damaged investor confidence in the rail sector, adding: “It doesn’t get much worse, does it?”
Griffiths, currently finance director of Stagecoach but speaking to the committee yesterday in his capacity as a member of the Rail Delivery Group, said: “We have come through a difficult time. To rebuild investor confidence and to do that quickly, we will have to understand in detail what a new model is likely to look like.”
Stagecoach has a 49% stake in Virgin Trains: Virgin Group owns 51%.
The MPs were taking oral evidence on the future of rail franchising, and also heard from RDG secretary Graham Smith, ATOC chief executive Michael Roberts, Passenger Focus chief executive Anthony Smith, pteg’s Geoff Inskip, LU’s managing director Mike Brown, and transport secretary Patrick McLoughlin.
Roberts said there was no doubt that the West Coast crisis had “dented confidence” in the franchising model, and suggested that TOCs would seek to reduce risk in the long term, potentially meaning higher costs for the taxpayer.
McLoughlin, appearing before the committee with the new DG for Rail at the DfT, Clare Moriarty, said the future of rail franchising will be set out by the Government at some point during the spring.
(Image of transport secretary Patrick McLoughlin and David Cameron: Stefan Wermuth / PA Wire)
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