RMTnews
:: april 2008 :: www.rmt.org.uk
Companywatch
REWARDING FAILURE AT FIRSTGROUP ransport privateer FirstGroup is celebrating after the Scottish government saw fit to extend First Scotrail’s franchise by three years beyond 2011. However, RMT is demanding to know why Scottish ministers have pre-empted a study by Audit Scotland, due out in October, intended to establish whether the franchise is giving Scotland value for money. This is particularly puzzling after the Transport Secretary Ruth Kelly slapped a £29 million remedial plan notice on the company’s failing First Great Western franchise south of the border. FGW is Britain’s worst performing train operator and as one of First’s senior executives recently candidly admitted to Rail Professional magazine:
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“The bottom line is that we run a shite franchise”. That did not stop the company boasting late last year that, due to rocketing petrol prices, that their profits rose to over £100 million for the previous six months. Unveiling this 11.8 per cent rise in operating profits, chief executive Moir Lockhead said that high fuel prices (as opposed to decent rail services) was forcing drivers out of their cars and on to bus and rail. As a result of this profiteering the interim dividend rose ten per cent and FirstGroup vowed to increase dividends by at least ten per cent for the next three years. That will be no comfort to FGW passengers who suffer such appalling levels of service.
But the question remains why did Scottish National Party ministers extend the First ScotRail franchise by three years when it was almost half-way through its seven-year term? The Scottish TUC and rail unions met the Scottish Transport Committee on February 21 to discuss the future of ScotRail franchise but no mention was made of extending the franchise. The mystery deepens when you consider that the SNP 2003 manifesto committed the party to return Scotland’s railways to the public sector, a policy which it never publicly abandoned. The union is also asking why ‘revenue sharing’ goalposts for the franchise are being shifted, handing FirstGroup shareholders a bigger slice of the income.
The original revenue-sharing arrangement provides that 50 per cent of any revenues more than two per cent above an agreed revenue target must be returned to the Scottish government. This proportion increased to 80 per cent for revenue more than six per cent above the target. The re-negotiated arrangement triggers the 50-50 share when revenues reach ten per cent above the revenue target, and the 80-per cent refund will now only be triggered when revenues reach 14 per cent above the target. The revenue targets remain, of course, a commercial secret. Nice work if you can get it.
Third Annual RMT Parliamentary Rail Seminar
Tuesday May 20 2008, 3 - 6pm, Committee Room 10 House of Commons Key Note Speakers Include Tom Harris MP, Rail Minister :: Bob Crow, RMT General Secretary :: Tony Ambrose, More Trains Less Strain Bob Laxton MP :: Gerry Doherty, TSSA General Secretary :: Sian James MP (invited) Stephen Joseph, Campaign for Better Transport :: Ann Henderson, STUC Assistant Secretary James Burt, Chair, Rail Personal Security Group :: Chair, John McDonnell MP In October 2007, Ruth Kelly announced ‘Towards a Sustainable Transport System’ a consultation to deliver a transport system to support the economy and reduce carbon emissions. This seminar will discuss the key challenges facing the rail industry in the context of the UK’s wider transport strategy. Key issues will include, • • • • • • •
The government’s 30 year rail strategy The case for public ownership Climate change and the need for a growing, affordable railway The views of passengers and rail workers The future of UK train manufacturing The campaign to reduce staff assaults Rail strategies in Scotland and Wales
The seminar will be useful for those with an interest in the rail industry and an excellent opportunity to discuss the challenges facing the railways. The conference is free of charge. Registration in advance by emailing James Croy at j.croy@rmt.org.uk or call 020 7387 4771 Spaces will be allocated on a first come first served basis.
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