National Express is striped of East Coast

Today National Express announced that they stop providing financial support to there lost making East Coast arm triggering the Government to remove the franchise from their control and for the year, run as a publicly owned company. This follows on from my previous story here.

National Express also runs two other franchises in NX East Anglia & c2c. East Anglia runs all the services out of Liverpool Street and c2c is an successful operation from Fenchurch Street to South Essex. Both are heavy commuter routes into London in the peak

More worrying signs that the DfT were prepared to strip National Express of all its franchises as in the words of Secretary of State for Transport, Lord Adonis “The Government believes it may have grounds to terminate these franchises, and we are exploring all options in the light of the Group’s statement this morning.”

In the statement he also added “A company which had defaulted in the way National Express now intends would not have pre-qualifed for any previous franchises let by the Department. I note that the parent groups of previous franchise failures are no longer in the UK rail business. It is simply unacceptable to reap the benefits of contracts when times are good, only to walk away from them when times become more challenging. “

On their website tonight is a paragraph in the trading statement not updated for todays events but clearly showing that National Express has walked away from East Coast but not the rail industry, “In the event that the Secretary of State for Transport ('Secretary of State') reassumes control of the franchise, National Express would work with the DfT to ensure an orderly handover and ensure that passengers, services and employees are unaffected. The Group does not expect that such circumstances would result in cross default of the Group's other rail franchises.”

If the DfT decides to try and strip National Express of all its franchises, then there will be a fight. In the case of c2c, it may be better to leave the franchise as it is and allow it to develop an improve an already good service. As for East Anglia, NX have recently order 30 class 379 Electrostars and 17 class 321 EMU to increase train length and cope with passenger demand.