Unions describe £7m deal as a “farce”
Transport Secretary Patrick McLoughlin yesterday announced he was extending the company’s £68m deal until 2019, during which a series of upgrades will take place on the network.
ASLEF general secretary Mick Whelan said: “This three and a half year direct award by the Department for Transport to First Group is absolutely outrageous. It guarantees the company an income with virtually no risk and no incentive to improve performance. I support many of the objectives of the DfT in terms of infrastructure and investment in the Great Western region but I find it hard to see how creating yet another short-term direct award will deliver these important and much needed upgrades, including electrification and the IEP rolling stock roll out.
“First Group opted out of a franchise extension in 2011 to avoid more than £800 million in premium payments to the Treasury but the collapse of the West Coast franchise in 2012 led to a number of direct awards and franchise extensions across the rail network – and means that First Group has now got the contract by default.
“I find it incredible that the Secretary of State for Transport can say this represents good value for money for passengers and taxpayers. First Group had his department over a barrel on this – and named its price. He should have given the Great Western franchise to Directly Operated Railways. Then we might have seen some returns to the taxpayer rather than to First Group’s shareholders.
“This award is a bad deal for passengers, and a bad deal for those who work in the rail industry, as well as a bad deal for taxpayers. It’s also a bad day for those people who have pushed privatisation for the supposed benefits they said it would bring.
“They said it would bring competition, innovation and investment and it has done none of those things. There is no competition – the train companies have protected routes – precious little innovation – the train companies were against the Oyster card – and all the investment comes from the government.
“The Secretary of State for Transport has rushed the East Coast – which brought £1 billion back into the Treasury in the five years it was under public ownership – while extending the FGW franchise which has cost the Treasury another £800 million. It is a staggeringly inept performance by a government minister.
“Made worse by all the investment in trains and infrastructure on the Greater Western lines in the coming years – the new intercity express programme and electrification – which is being paid for by the taxpayer. No wonder the privatised train operating companies are so against the East Coast, in public ownership, as a public sector comparator – it’s because they want, and get, a free ride from this government. A free ride at the taxpayers’ expense.
“That’s why opinion polls now show that 80% of people want Britain’s railways brought back into public ownership.”
RMT general secretary Mick Cash said: “The contract extension to First Great Western truly is reward for failure on a grotesque scale.
“This is a company that ducked nearly a billion pounds worth of payments to the taxpayer, rakes in a fortune, offers lousy quality of service and treats it’s staff like dirt.
“Only on Britain’s privatised railways could an outfit this toxic be given a green light to carry on its racket. The public will be appalled and the fight for public ownership of rail goes on.”
TSSA general secretary Manuel Cortes said: “The so called market driven rail franchise system has been reduced to a farce by the Secretary of State who seems much more interested in behind closed doors deals.
“Once again he has simply extended a franchise to the sitting tenant without any pretence at competition. No wonder Tim O Toole is so pleased.
“Obviously, we welcome the fact that £7 billion is being spent on modernising the lines to Wales and the West Country but it is surely worth noting that it is our money that is being spent, the taxpayers are footing the bill.”
He called on Labour leader Ed Miliband to scrap private rail franchises if he wins on May 7.
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