Rail franchises operators & contracts

07.01.19

Stagecoach took £35m from rail franchise before abandoning East Coast Main Line

Transport giant Stagecoach took out £35m from the East Midlands Trains franchise before it abandoned the London-to-Edinburgh East Coast Main Line (ECML) less than a year later, it has been revealed.

The massive dividend represents a £20m increase on the previous year’s payment from East Midlands Trains to its owners Stagecoach, according to the company’s accounts.

The Mirror reported that the £35m dividend was made to Stagecoach shareholders before leaving the ECML franchise last year, despite accounts showing that profits slid by 24% to £19.5m in the year to the end of April.

Labour criticised the move, with shadow transport minister Andy McDonald saying: “These dividend payments to shareholders are a major kick in the teeth for passengers who have just been forced to suck up another unfair rise in rail fares.

“Profit has been privatised, whilst loss-making franchises are just handed back to the government, no questions asked.”

This comes as train fares rise by an average of 3.2%, which sparked major protests across the UK against ticket prices.

Back in May, Chris Grayling said Stagecoach, which operated the line in conjunction with Virgin Trains, was making “significant losses” and the franchise would therefore return to public control as it would not be able to continue.

A Stagecoach spokesperson commented: “The East Midlands Trains franchise has delivered industry leading levels of performance over the last ten years and customers have benefited from millions of pounds of investment to improve services. We have also continued to pay substantial premiums to government.

“As with any private company, and as per our contract with the Department for Transport, it's normal practice that dividends are paid out to shareholders where applicable.”

Comments

There are no comments. Why not be the first?

Add your comment

 

rail technology magazine tv

more videos >

latest rail news

Ground-breaking rail collaboration launched to improve services for passengers

20/09/2019Ground-breaking rail collaboration launched to improve services for passengers

  A ground-breaking deal has been agreed today among rail bosses to deliver higher standards for rail users in the West Midlands.  ... more >
Manchester Metrolink’s greener future

19/09/2019Manchester Metrolink’s greener future

Transport for Greater Manchester (TfGM) are to renew and upgrade Manchester Metrolink’s electrical infrastructure in a bid to support and m... more >
Plans for new £362m North East metro train fleet

19/09/2019Plans for new £362m North East metro train fleet

A £362m train fleet for the Tyne and Wear Metro was ordered yesterday by public transport body Nexus. A company for the designing and ... more >

editor's comment

23/01/2018Out with the old...

Despite a few disappointing policy announcements, especially for the electrification aficionados amongst us, 2017 was, like Darren Caplan writes on page 20, a year generally marked by positive news for the rail industry. We polished off the iconic Ordsall Chord (p32), hit some solid milestones on Thameslink (p40), progressed on ambitious rolling stock orders (p16), and finally started moving forward on HS2 (p14) ‒ paving the way for a New Ye... read more >

last word

Encouraging youngsters to be safe on the railway

Encouraging youngsters to be safe on the railway

This summer, Arriva Group's CrossCountry and the Scout Association joined to launch a new partnership to promote rail safety among young people. Chris Leech MBE, business community manager at the... more > more last word articles >

'the sleepers' daily blog

Connecting Network Rail with the supply chain

17/09/2019Connecting Network Rail with the supply chain

Continuing our mission to connect buyers with suppliers, This year TransCityRail North is adding a new element to the event. We are introducing an incomparable opportunity for you to meet with over 11 procurement directors from Network Rail at our exclusive 'Network Rail Meet the Buyers Hub'.  Situated at the heart of the event ... more >
read more blog posts from 'the sleeper' >

comment

The challenge of completing Crossrail

05/07/2019The challenge of completing Crossrail

With a new plan now in place to deliver Crossrail, Hedley Ayres, National Audit Office manager, major projects and programmes, takes a look at ho... more >
Preparing the industry to deliver trains for the future

04/07/2019Preparing the industry to deliver trains for the future

The move to decarbonise the rail network involves shifting to cleaner modes of traction by 2050. David Clarke, technical director at the Railway ... more >
Sunshine future beckons for South Wales Railways, says 10:10 Climate Action’s Leo Murray

02/07/2019Sunshine future beckons for South Wales Railways, says 10:10 Climate Action’s Leo Murray

Smart electrification is the way to boost clean energy resources, argues Leo Murray, director at 10:10 Climate Action. Contractors are clear... more >
Ambition doesn’t have to be expensive, says Midland Connect's Maria Machancoses

02/07/2019Ambition doesn’t have to be expensive, says Midland Connect's Maria Machancoses

The TCR Midlands conference is only days away and tickets are going fast for the sector event of the year at the Vox Conference Centre in Birming... more >

rail industry focus

  • 11/09/2019The next generation of rail infrastructure

    How the rail industry delivers the next generation of complex infrastructure will rely heavily on the people tasked with leading the projects, and the...
  • 11/09/2019Putting passengers first

    How does the rail industry design the railways for the next 40 years, and when it does, how do we make sure it’s all done with the passenger in mind?...
  • 10/09/2019Cleaning up the railways

    Jim Knox, director of Gard Chemicals, explains how the company is helping the rail industry ensure they have the best cleaning and maintenance...
View all News

interviews

Andrew Haines, CE of Network Rail, tells BBC News his organisation could issue future rail franchises

24/06/2019Andrew Haines, CE of Network Rail, tells BBC News his organisation could issue future rail franchises

Andrew Haines, the Chief Executive of Network Rail, has told the Today programme on Radio 4's BBC’s flagship news programme that he wo... more >