People with knowledge of UK government plans say that the UK will not terminate the contract of troubled intercity railway operator Avanti West Coast. In the past year, leaders in the north demanded that the operation of this route, which connects London to cities such as Birmingham, Manchester, and Liverpool, be nationalised due to their frustrations with its performance.
According to figures from the industry, Avanti had the worst performance of any train operator in Britain between April and June. Office of Rail and Road figures showed that almost 60% of Avanti’s trains were late during the period, which was twice the national average. The cancellation rate was also double the national average. People familiar with the findings have said that legal advice given to the Department of Transport concluded, however, that the operator did not breach its performance obligations.
One person said that the most recent contract of the company was written in a way to make it very difficult for the company to break on performance grounds. Louise Haigh, Transport Secretary said: “The Conservatives punished failure by awarding Avanti an nine-year contract. Their shockingly low standards make it difficult to breach the contract, despite Avanti’s poor performance.
“We have read every word of the contract, and we have sought legal advice.” . . “We will take Avanti public as soon as possible.” The route may be one of the final ones to be nationalised, as the Labour Party plans to bring all rail services gradually under state control. The government is instead working under the assumption that Greater Anglia and West Midlands Trains will be the first to be nationalised in early 2019.
In his speech at the Labour Conference in Liverpool earlier on Tuesday, Starmer argued for the Railway Services Bill “bringing the railways back to public ownership”. Since it took on the largest intercity rail line in 2019, Avanti, owned by First Group and Trentitalia has been heavily criticized for its reliability and service quality. After a short period of improvement the Conservative government extended its contract by nine years with a termination clause in 2026. The performance then plummeted again.
Transport for the North members voted in April to nationalise the service due to its unreliability and poor customer service. Andy Burnham, Labour Mayor of Greater Manchester, said that he “completely ran out of patience” when dealing with the operator.
The Department for Transport stated at the time that the removal of Avanti’s contracts would not solve the problems, which it claimed were caused by factors beyond the control of the company, such as weather and infrastructure issues. Three months later Labour was elected on the promise of nationalising all of the network at each expiration date.
Once a break has been implemented, two people who are familiar with the situation said that the earliest possible end date is 2027. When the Passenger Railway Services Bill receives royal assent, which is expected later in this year, it’s expected that the government will begin its wider nationalisation process.
The bill will return to the government all contracts for train operators that are let to private companies as soon as they expire.
The “Operator of Last Resort” of the Department of Transport, which currently operates four English rail franchises for the government, would run these former franchises. South Western Railway will expire first in May 2025. The government may also be able to exercise break clauses in the contracts with train companies, bringing them into the country earlier. The government will begin nationalisations once it has given the required notice of three months to one of the two operators, Greater Anglia or West Midlands Trains, both operated by TransportUK.
An official from the government said that the process is expected to begin in February. The industry executives think that ministers were considering starting with a prominent operator in trouble, like Avanti or Cross Country which received a notice of improvement in August.
They said it would be easier to start with one of Transport UK’s franchises, as they are both doing well. Dominic Booth, chief Executive Officer of Transport UK, said that the rail industry needs reform but that the government should focus on the poor performers.
He said: “With the state of the economy, it is hard to believe that the secretary of State would nationalise only the operator who delivers a premium for the Treasury rather than ending the subsidies paid to poor performers at taxpayers’ expense.” Greater Anglia has the highest reliability rating, according to data from recent years. It is also the only operator to return surpluses to the government.
A senior executive in the industry warned that nationalising several operators within a short period of time was a “recipe for failure and risk”.First Group and Trenitalia declined to comment. TransportUK and the Department for Transport did not comment immediately.
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