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THE bailed-out owner of Virgin Trains East Coast announced an 8 per cent profit surge yesterday and suggested it could even bid again for the franchise.
Majority-shareholder Stagecoach, along with Sir Richard Branson’s Virgin, was due to pay Whitehall £3.3 billion to run the flagship route until 2023.
But ministers announced last week that the franchise will be ended three years early after the operator complained it was proving too costly to run.
Labour said the arrangement was a “bailout” which could effectively offer the transport giants relief of up to £2bn.
Now Stagecoach chief executive Martin Griffiths has said the company is “working with the Department for Transport towards new contracts at Virgin Trains East Coast.”
And he did not rule out bidding again for the East Coast Mainline, which will be run from 2020 under a “partnership agreement,” in which track maintenance is also handed over to privateers.
Transport writer Christian Wolmar, the author of a book on the rise of Stagecoach, told the Star: “It demonstrates the extent to which the private companies realise this is a one-sided deal.
“They get the upside if it goes well, and the government gets the downside if it goes badly.”
The move comes as Stagecoach announced an 8 per cent jump in half-year pre-tax profits to £96.7 million. Rail union RMT, which is balloting for strike action over pay and terms at the company, said there was now “no excuse” for the company not to settle the dispute.
“The announcement of a massive surge in profits at Stagecoach today blows apart claims from the rail industry bosses’ club, the Rail Delivery Group, that its members aren’t making fat profits off the back of the workforce and the fare-paying public,” the union’s general secretary Mick Cash said.
“[Company bosses] are filling their boots like it’s going out of fashion and they now have the benefits of a £2 billion taxpayer-funded bail-out on the East Coast to keep them warm over Christmas.”
Stagecoach, which was founded by businessman and SNP donor Brian Souter, still cautioned that its rail profits in Britain would be “modest” over the second half of the financial year.
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