Page last updated at 03:01 GMT, Friday, 13 November 2009

State taking over key rail route

National Express train
The government says passengers will be unaffected by the handover

One of Britain's key rail routes is to be taken into public hands later.

National Express will hand back East Coast Mainline services between London and Edinburgh and the rest of the East Coast franchise just before midnight.

Falling revenue and rising costs left it unable to meet a commitment to pay £1.4bn for the franchise until 2015.

A government company, Directly Operated Railways, will run the franchise for at least 18 months. Ministers say staff and services will be unaffected.

Scottish First Minister Alex Salmond has raised fears that services on the franchise's Glasgow branch, which provide 25,000 seats a week, will be scrapped by the end of next year.

'Radical reform'

However, Labour's Lord Foulkes said he had contacted UK Transport Secretary Lord Adonis's office to be told that "no proposals for change" in the timetable had been put to him.

East Coast Mainline passengers react to the announcement

Ministers had refused National Express's requests to renegotiate the franchise, which it has run since 2007. It will instead be offered again at auction, probably in 2011.

Earlier this week National Express, which also operates coaches, said it plans to raise £360m from investors in order to cut its debts of £1.1bn.

Unions have called for the company's other franchises, covering routes between London and both East Anglia and southern Essex, to be taken away.

The RMT union wants the government to use the East Coast development as a first step to renationalising the whole railway network.

General secretary Bob Crow said: "The game's up for railway privatisation in the UK. The bulk of the other rail franchises are only being kept afloat by hundreds of millions of pounds of taxpayer subsidy."

Shadow transport secretary Theresa Villiers has called for "radical reform" of the franchising process to encourage "better long-term strategic planning".



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SEE ALSO
Transport firm in 360m cash call
11 Nov 09 |  Business
Date named for rail line takeover
05 Nov 09 |  Business
National Express 'lacks strategy'
30 Oct 09 |  Business
National Express ends bid talks
29 Oct 09 |  Business
National Express warns on profits
22 Oct 09 |  Business
East Coast rail to be state-run
01 Jul 09 |  Business

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