THE largest rail union has demanded that FirstGroup should be banned from bidding for any further rail franchises, after the Group announced that it would not be taking up the option to run Great Western for three years from 2013. It will, however, bid for the next GW franchise.
The company had indicated in March that it was considering whether to continue with the franchise after 2013.
The RMT said the decision had saved the Group £826 million in premium payments which would have become due in those years, and dubbed the decision as 'scandalous'.
FirstGroup chief executive Tim O'Toole told the Stock Exchange that the decision had been a 'commercial' one.
Mr O'Toole said: "The Government has announced franchise reform and major investment in the region including the redevelopment of Reading station, resignalling and electrification of the Great Western Main Line, the Intercity Express Programme and Crossrail. With our unique knowledge of the franchise we believe we are best placed to manage these projects and capture the benefits through a longer-term franchise. We will continue to operate First Great Western until March 2013 and will meet all of our obligations under the Franchise Agreement."
When the newly-enlarged 'Greater Western' franchise was awarded to FirstGroup in December 2005, the Department for Transport said that the Group had 'undertaken to pay DfT a premium of £1,131 million over 10 years', and the transport secretary at the time, Alistair Darling, hailed the contract as "a good deal for the taxpayer".
The DfT had also said that the contract had been let for ten years, 'with the final three years dependent on service performance achieving preset targets'.
The RMT's general secretary Bob Crow said: "By pulling out three years early First Group have dodged over £800 million due to the UK taxpayer while soaking up £141 million in taxpayer subsidies – that’s the best part of £1 billion that it has cost the British people to underwrite this scandal.
"The idea that on the back of this billion pound rip off that the company should be allowed to put in for a new 15 year deal is simply outrageous."