Yahoo Finance Northern Rail franchise on brink of collapse
The Northern rail franchise faces financial collapse in “months,” UK Transport Secretary Grant Shapps said on Thursday.
Following a proposal from the troubled train operator on options for continuing its franchise, Shapps announced that he will decide whether current operator Arriva Rail North (ARN) will be given a short-term contract.
The other option being considered is the “last resort” of temporary re-nationalisation. The decision is expected to be made by the end of January.
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Longer-term decisions on the future of the franchise will be influenced by the soon-to-be published Williams Rail Review, an inquiry that has recommended a complete overhaul of the rail franchising system.
“It has now been confirmed to me from the most recent available financial information that the franchise will only be able to continue for a number of months,” Shapps said.
Northern rail has been beset with difficulties in recent years, including widespread cancellations, delays, and high levels of strike action.
Arriva has apologised to customers but said that many of the problems were outside of the operator’s control.
Chris Burchell, Arriva’s managing director of UK trains, said: “Many of the issues affecting the franchise however are outside the direct control of Northern. Assumptions were given when the plan for the franchise was developed that critical infrastructure projects would be delivered to enable growth and support capacity demands.
“Many of these have either been delayed or cancelled. This, along with unprecedented levels of strike action, has had a significant impact on the franchise – both in terms of service and financial performance.
“These challenges will continue to affect services irrespective of who is running them.”
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The government’s announcement has received a mixed response.
Shadow transport secretary Andy McDonald said: “The fragmented rail system does not work. The government should get on with it and bring track and train together under one company in public ownership.”
Transport for the North’s strategic rail director David Hoggarth is hoping for “the chance of a fresh start.”
“We welcome the clear timeline for a decision to be made by the end of January. We’ve been clear that putting an operator of last resort in place of Northern would be the only way to rebuild trust and confidence, and secure the right outcome for passengers,” Hoggarth said.
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David Sidebottom, director of watchdog Transport Focus, said: “Whichever organisation runs Northern rail services, under whatever new arrangements, passengers will want a reliable service.
“They also need a clear plan on how the next operator will deliver sustained improvements without disruption and introduce all the new trains promised to increase capacity and address overcrowding.
“Passengers deserve better. The next operator must listen to passengers and communicate their plan to improve services and rebuild trust amongst passengers.”
