Labour Research February 2010


Rail franchises

The RMT rail union has attacked government plans to extend the franchises sold to train operating companies (TOCs), despite admitting that it has not carried out any value for money comparison on the alternative option of running rail services in the public sector.

The union’s general secretary, Bob Crow, said that privatisation had been “a licence to print money” and believes extending the franchises will be “electoral suicide” for Labour.

Three of the 15 franchises managed by the Department for Transport — Essex Thameside, Greater Anglia and InterCity East Coast — are up for re-letting. While the government is looking to extend contracts to as much as 22 years, a study by consultants KPMG found no conclusive evidence of the impact of contract length on performance.

It said that some companies don’t even see out the full term of their contracts, and “performance can also deteriorate as management seeks to cut costs to reduce financial losses”.