Stagecoach urges radical reforms to rail franchising

Stagecoach operates the East Midlands Trains and South West Trains franchises, and also has a 49 per cent interest in Virgin West Coast

STAGECOACH Group founder Brian Souter has entered the fray in the debate over future rail franchises, by urging much greater reforms. His call comes as the government is poised to publish the McNulty ‘value for money’ rail report. Mr Souter, who started his transport career as a bus conductor and now heads a major group, said ‘tinkering around the edges’ would not be enough.

The Stagecoach proposals include trials of ‘vertical integration’, in which the operator is also responsible for track maintenance and train regulation, removing an ‘artificial split’ between track and train that is ‘inefficient and not in the best interests of passengers’.

Vertical integration was normal in Britain until privatisation in the 1990s, which included the creation of Railtrack (now Network Rail) to take over network operation and maintenance.

Stagecoach said it had developed a ‘low cost’ model for future franchises, having already removed 25 per cent of ‘controllable’ costs from its own franchises since 2008.

Mr Souter explained: “We are at a crucial crossroads for the rail network. We have a once in a generation opportunity to deliver real change that will benefit both passengers and taxpayers.

“But we must not take the easy option of tinkering around the edges – we need radical reform. Our proposals ensure that customer, safety and shareholder interests are brought together as the focus of a new model. These interests have never been properly aligned in the past.

“We believe this is the only way to deliver a safer, more efficient and more reliable railway in the long-term. Stagecoach has successfully delivered change before and we could do it again. Our plans would unlock the investment and innovation of commercial operators, provide value for money, and deliver better services to the millions of people who rely on our railways every day.”

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