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Surfing a wave of demand
By the BBC North's Transport Correspondent Alan Whitehouse

Like the rest of the country, Northern Britain's rail network was fragmented after privatisation. There are six passenger train companies and three freight companies operating from the English-Scots border down to the North Midlands and Lincolnshire. So far, their track record has been mixed.

Some companies are seeing huge passenger growth and forecasts suggest they will do even better in the new millennium. But others will not be so fortunate. First North Western, for example, is forecast to achieve only 30% passenger growth compared to 116% for Virgin Trains West Coast Services between London, Manchester, Liverpool, Preston and Scotland.

Two-tier network

Research commissioned for the BBC by the Advanced Railway Research Centre (ARRC) at Sheffield University shows that the railway system is dividing itself into a two-tier network. Inter-City services between major Northern cities and London, and fast inter-urban trains such as those linking Northern cities on both sides of the Pennines are becoming significant money spinners. They will require little or no public subsidy - something widely considered impossible in British Rail days.

But beneath them will be a lower tier of secondary and branch line services that will need a continuing subsidy for as far ahead as anyone can see. The worst performing lines will need a subsidy of 15 for every 1 collected in fares by the end of the current round of seven-year franchises in 2003/4.

The Northern Rail network is poised to surf a wave of demand from new passengers. Companies such as Northern Spirit and Great North Eastern Railway have already seen growth far in excess of original franchise predictions - in both cases seven years worth of predicted growth has been swallowed up in three years.

Passengers lead to profits

The research shows that if demand continues to rise at current rates by 2015 Great North Eastern Railway trains will be running at least 85% full on average - this means popular peak time trains will become overcrowded. Virgin's West Coast service will be running 75% full.

This will bring potential for significant increased profits from the increased ticket sales. GNER for example made 15m profit in 1997 - by 2015 our research indicates that this could have risen to as much as 171m. Virgin have already announced their rail profits double last year - and by 2014 those profits could be running at over 347m per year.

Track Record Close-up North on 2 December on BBC Two at 1930 takes a great railway journey across the North of England to see whether privatisation has been a success or a failure. Are passengers getting the deal they think they deserve? And do the trains really run on time now they're privately owned?