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The Government’s rail bailout

By Angela Harbutt
July 2nd, 2009 at 1:29 pm | 11 Comments | Posted in UK Politics

Quite a lot of nonsense has been written about the recent announcement that the Government has stripped National Express of its franchise to run the East Coast mainline. Something which is going to cost us a lot of money. 

So lets be clear .

THIS IS THE GOVERNMENT’s FAULT. plain and simple.

1. GREED- the Government wanted to raise some cash (for the next potty plan up its sleeve no doubt) and cut its own cash input into the railways.  So it set up a sealed bidding process that blindly awarded rail contracts to the highest bidder. There was no account taken of how feasible/affordable that bid was. We all know that the highest bid is not always the best bid – which one would have hoped would have weighed with the governement- unless of course, it did not give a toss.

2. INCOMPETENCE : They were either stupid or lazy (or most likely, both) to allow the Franchisee (National Express) to create an entirely separate company to operate the franchise – thereby allowing the bidder to cap potential losses in event of problems. National Express did what any sensible company would do to protect its shareholders/investors money. Dont blame them if the rules they were told to play by had holes the size of channel tunnel in them.  

It still is unclear where the Government is even capable legally of stripping National Express of the other two franchises it operates. Incompetence piled on more incompetence .

But I dont know why we should expect anything else from this government. More fiasco’s will follow as this sorry mess unravels.

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