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Last Updated: Tuesday, 27 January, 2004, 20:31 GMT
Review of train leasing urged
Train in service
Rail operators cannot afford to rent enough carriages on some routes
The way train leasing companies operate needs to be investigated, according to Commons Transport Select Committee chair Gwynneth Dunwoody.

Three rolling stock leasing companies, known as roscos, own nearly all the trains in the country but lie beyond the control of the Department of Transport or the Strategic Rail Authority.

Wholly owned subsidiaries of major banks HSBC, Abbey National and the Royal bank of Scotland, they generate their income by leasing trains to the railway operating companies.

Mrs Dunwoody said the roscos were benefiting from public subsidy paid to the railways, costing the taxpayer "bags of gold" whilst passengers face high ticket prices and overcrowding.

Performance unregulated

Her accusations come after BBC Radio 4's File On 4 programme revealed a growing anger among train operators about the scale of the leasing charges being imposed by the rolling stock companies.

In documents submitted to the Strategic Rail Authority, and seen by File On 4, they are accused of running an "oligopoly" which is responsible for keeping train costs high.

According to First Group, which runs the London to Plymouth service: "This oligopoly is able to maintain high lease rentals on existing stock without taking any risk on improving passenger facilities, running and maintenance costs, and performance."

Another major train operator, Arriva, says that "the leasing arrangements are unfairly balanced in the roscos' favour. We believe there is scope for a reduction in costs in the short to medium term."

Mrs Dunwoody told File On 4: "We ought to be investigating what leasing companies have done in the past, how much profit they have made and what their policy is for the future of the railway industry."

None of the rolling stock companies would be interviewed.

File On 4: BBC Radio 4, Tuesday 27 January at 2000 GMT and Sunday 1 February at 1700 GMT.


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