State-owned East Coast paid £225m to Treasury – but still faces privatisation

Transport union leader says reprivatisation of most popular long-distance railway franchise is 'all about Tory dogma'
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East Coast train at London's Kings Cross station.
An East Coast train at London's King's Cross station. The state-owned firm has paid £1bn to the government over the past five years. Photograph: Martin Keene/PA

The state-owned East Coast railway paid £225m to the government in the year to March 2014, the last financial year before it is reprivatised.

Results published by Directly Operated Railways (DOR), the company established in July 2009 to take over the running of the London-to-Edinburgh route from the loss-making National Express, showed that its premium payments to the government had risen from £202m to £216.8m in 2014, making a total of more than £1bn over its five-year lifespan.

The firm also made pre-tax profits of £8.4m – a rise of 40% – which were paid as a dividend to the Department for Transport. Just under 20 million passenger journeys were made with East Coast during the year, generating revenues of £720m. The line will be put back into private hands in March 2015.

Doug Sutherland, chairman of DOR, said: "During the year, we continued to make further good progress with the business turnaround of East Coast, and at 91%, we were able to achieve the top customer satisfaction result for a long-distance franchised rail operator."

Three shortlisted groups are contenders to take over East Coast, with the award expected late this year: a Stagecoach-Virgin joint venture; First Group; and a joint venture between Keolis and Eurostar, subsidiaries of France's state-owned railway company, SNCF.

The success of the line in state hands, since National Express gave up its franchise in 2009, has made its ownership a totemic issue with unions and political parties as the future of the rail industry is debated ahead of the next election.

Manuel Cortes, leader of the TSSA rail union, said: "This firm will have paid £1bn to the Treasury by the time it is sold off. This is all about Tory dogma rather than running a social railway for the benefit of the public."

Mick Cash, the acting general secretary of the RMT rail union, said: "Reprivatisation of the East Coast mainline defies all economic logic and is nothing less than an act of industrial vandalism."

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