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Friday, March 6, 1998 Published at 17:13 GMT


oldBusiness

Rail takeover 'to benefit passengers'

The deal now leaving platform 12 is better for passengers

A controversial takeover of a privatised passenger train company will go ahead after the rail franchising director ordered the new company to give passengers a better deal.

The takeover of Great Western Railways by bus and train operator FirstGroup means former British Rail managers will share up to £10m in profits.


[ image: These trains will be replaced by 2002]
These trains will be replaced by 2002
MPs were outraged when the deal was first mooted but the rail franchising director John O'Brien, has announced a £75m package of benefits for passengers on Great Western and two other rail routes.

GWR, which operates services out of Paddington station in London to South Wales and the South West, has to get £32m-worth of new trains in service by June 2002, and all season ticket holders will get a week's free travel.

There will also be fines for trains running late, £250 for 20 minutes late, £500 for 30 minutes late and £1,000 if cancelled altogether.

Mr O'Brien has demanded that £1m be spent on passenger benefits on North Western, and that all 96 slam-door trains on Great Eastern be replaced by the end of 2002 at a cost of £35m. Both lines were run by GWR.


[ image: Season ticket holders will get a week's free travel]
Season ticket holders will get a week's free travel
When news of FirstGroup's interest in Great Western first broke, passenger groups were outraged.

Among former BR staff likely to benefit from the takeover is GWH chief executive Brian Scott who, in 1993, wrote to the then Transport Secretary Sir George Young saying the proposed break-up of British Rail would not work.


Moir Lockhead, Chairman of FirstGroup, is delighted by the deal (18")
Trevor Smallwood, FirstGroup executive chairman, said: "We are delighted to have reached agreement with GWH."

But Keith Bill, national secretary of pressure group Save Our Railways, said it was "quite wrong to cobble together a deal behind closed doors."


John Prescott interviewed on the BBC's World at One (1'40")
The Deputy Prime Minister John Prescott told BBC Radio 4's The World at One: "I, like most other people, feel this privatised railway system turns people into millionaires at the expense of the passenger and the taxpayer. That's totally unacceptable.


[ image: GWR will be fined for late or cancelled trains]
GWR will be fined for late or cancelled trains
"Last October, I gave different directions to the Franchise Director, that he must now put the passenger interests to the fore.

"I'm obviously looking at these matters as to exactly what my powers are in these areas ... And the Franchise Director and the Regulator have made clear to me they don't have adequate powers."

However, denying suggestions by the Transport Minister Gavin Strang he stressed: "We're not introducing another windfall tax. There's no doubt about that."



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