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Rail
Unions to seek judicial review of rail sale
From the Financial Times of Fri, 04 Apr 2014 20:12:04 GMT
Passengers pass an East Coast mainline passenger train, left, as they walk along the platform at Kings Cross rail station in London, U.K., on Thursday, Sept. 26, 2013. Google Inc., owner of the world's largest search engine, won local government approval to build its new U.K. headquarters next to King's Cross train station, which opened its new square today©Bloomberg

London King's Cross station, southern terminus of the East Coast network

Rail unions have decided to seek a judicial review of the competition to run the East Coast main line in an attempt to halt its transfer into private hands next year when the franchise is relet.

The line, which runs from London King’s Cross to Leeds, Newcastle and Scotland, is the only state-run railway franchise. Labour and the unions have lobbied hard to keep it public, arguing that it is one of Britain’s best-run lines.

However, the contest to run the line is now under way, after ministers scheduled its privatisation before the general election. Three bidders have been shortlisted – train and bus company FirstGroup, a joint bid from Eurostar and Keolis, and another from Virgin Rail and Stagecoach – with a decision expected in
September and the service due to be transferred in February.

A legal review of the competition would be likely to delay any decision until after the general election. Three unions – the RMT, Aslef and TSSA – would share the cost, with similar reviews costing between £50,000 and £100,000. People close to the union consultations say an announcement is due next week.

News of the potential union action comes as Ed Miliband considers the case for taking more rail franchises back into public ownership, although Labour is likely to stop short of full-scale nationalisation.

The Labour leader said on Thursday that he supported “innovative solutions” on the railways, as long as they were affordable.

The opposition party believes the nationalised East Coast has performed well in the past five years and would like to maintain at least one line as a state-controlled “comparator” against which the performance of other, privately run lines would be judged.

“The experience of East Coast, which has been in public hands, has been a good experience,” said Mr Miliband.

“The government is dogmatically wanting to privatise East Coast. I don’t think you should approach this issue with dogma on either side. . . You can have a competitive model where there is a public option like there is in East Coast at the moment.”

The unions, which have been arguing for full nationalisation, are likely to see this as a weak alternative. But many senior figures in Labour, despite recent anti-corporate rhetoric, do not want to throw the entire industry into turmoil with a nationalisation drive.

The decision comes as some in the industry question whether the government’s franchising department is yet in a fit state to oversee the approaching busy period of tenders.

After the collapse of the West Coast main line tender in 2012, the Department for Transport admitted that it lacked the expertise to ensure the smooth reletting of franchises.

Only 12 out of 28 vacant posts in the franchising team have been filled and concerns have been raised that pay has not been high enough to attract the right people.

A transport department official said: “A recruitment campaign was launched in the autumn to fill 28 vacancies within the department’s rail team, which was enlarged following an independent review. Twelve of these have now been filled and work is ongoing to recruit for additional posts.

“The recent achievements with the East Coast and Northern rail franchise competitions demonstrate that our programme remains on track and will deliver benefits for passengers and taxpayers alike.”



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