Rail franchises operators & contracts

07.01.19

Northern owner Deutsche Bahn wants compensation from Network Rail over extensive delays and disruption

Deutsche Bahn has demanded Network Rail pay compensation for the extensive delays in electrifying its under fire Northern rail franchise.

First reported in the Telegraph, the parent company of Arriva Rail North, who run the struggling operator, blames Network Rail for plunging profits reported in accounts filed last week, and is now seeking reimbursement.

Arriva Rail North’s accounts for the year up to March 2018 revealed that, whilst revenue had mostly stayed the same as last year at £629m, pre-tax profits have fallen 40pc to £12.7m and dividends to Deutsche Bahn were cancelled for a second year in a row.

The German company’s financial statement read: “The ongoing late delivery of new infrastructure has consequently prevented the company from introducing the increased capacity and frequency required to deliver the planned growth in customer journeys and revenue.

“Compensation for this is being sought and potentially there are a wide range of outcomes as a result.”

It is claimed that the electrification has been delayed by over a year, with the work originally due to be completed by December 2017.

Northern has been repeatedly criticised over cancellations and delays to its services, and has been involved in a bitter dispute with the RMT union over having a guard on its train services, which has seen 43 days of strike action so far.

In November, Northern and Deutsche Bahn entered crisis talks with the government over the massive levels of disruption, with the Telegraph revealing the “catastrophic mismanagement” that led to the taxpayer bail-out soaring to £282m.

Most recently, Northern came under fire from the RMT over “secret extra payments” after it revealed that the train operator was paid £31m more by the government than had been previously planned.

The DfT rubbished the claims, stating that the RMT had used a misleading argument that showed a “total misunderstanding of the figures” and Northern said the “secret” extra money was simply due to changes in services and other policy areas.

Image credit - katatonia82

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