A SENIOR industry figure has spoken out against Labour's recently-agreed proposals to allow the government to compete for future franchises.
The Department for Transport currently runs intercity services on the East Coast Main Line via its subsidiary Directly Operated Railways, but this operation is set to return to the private sector in March next year.
The public sector has been running East Coast since 2009, after National Express was forced to surrender the contract.
Unions and transport campaigners have been pointing to the level of premiums paid by East Coast since then and arguing that the taxpayer has been gaining from nationalisation, but transport secretary Patrick McLoughlin has remained firm about reletting the franchise.
When a prospectus for East Coast bidders was published last October he said: "Since 2009, the East Coast franchise has been stabilised under government ownership, but management by Directly Operated Railways was never planned to be a permanent arrangement. The government believes a strong private sector partner, as an innovator and investor, will build on this stable basis and deliver a world-class railway for passengers and best value for the taxpayer."
Now Go-Ahead chief executive David Brown, whose Govia joint venture with Keolis has just won the new Thameslink, Southern and Great Northern franchise, has joined the debate by defending the government's policy.
Speaking to the Financial Times about the supporters of continuing nationalisation, he said: "My view is, what problem are they trying to solve? If it’s about competitiveness, there’s already competitiveness. If it’s about trying to take away profits, there are very low profit margins on the railways. Whatever it is, I don’t see that the answer is Directly Operated Railways.”
Stagecoach chief executive and Rail Delivery Group chairman Martin Griffiths has already spoken in favour of reprivatising East Coast, warning that the direct participation of government could deter private sector bids.
FirstGroup, Keolis/Eurostar and Stagecoach/Virgin Trains have been shortlisted for the East Coast contract, and the winner is due to be announced in October.