IF Martin Griffiths was to pen a letter to Father Christmas, his wish would likely be a rail franchise system where the operator’s risk is vastly reduced.
In Stagecoach’s interim results the group’s chief executive wrote optimistically, encouraged by performance and the Government’s willingness to make “sweeping” changes to the system.
It is fair to say that Stagecoach could teach the Brexit negotiating team a thing or two. Last week it was announced that the East Coast contract, which Stagecoach said with hindsight it would have bid less for, will end three years earlier than planned, as the Government seeks to avoid the embarrassment of a second successive contractor abandoning the franchise – after National Express in 2009.
Since that announcement, Stagecoach’s market value has risen by more than £100 million, indicating that investors have been warmly receptive to the Government’s plan.
While the situation may irk many rail customers, what is clear is that the franchise system does require an overhaul, and it could be that Stagecoach’s plea for renegotiation of the East Coast line proves to be the ultimate catalyst for that change, which will include pooling trains and track management.
For investors – including Sir Brian Souter with his 15 per cent stake – that would quite a present to find under the tree.
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