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National Express today said it will go to war with the Government after the Department for Transport sacked it from the East Coast Main Line out of King's Cross and threatened to strip it of its Liverpool Street and Fenchurch Street franschises.
In a day of turmoil for National Express, its crisis deepened as chief executive Richard Bowker, who signed up the group to its overly ambitious East Coast contract, quit. Bowker, a former Government rail czar, is to take up a lucrative role to build a £20 billion rail network in the oil-rich United Arab Emirates.
Transport minister Lord Adonis today said he has sacked National Express from the East Coast Main Line after it refused to honour its commitments to pay back forecast excess profits of £1.4 billion over seven years.
National Express had told the minister it would have to renege on its commitments as the King's Cross business has lost £20 million over the last six months as business folk quit the first-class carriages and leisure passengers boycott National Express's rip-off "walk-on" fares.
But Adonis said he could also strip National Express of its East Anglia services and c2c line to south Essex. He added: "The Government believes it may have grounds to terminate these franchises."
Noting that King's Cross operator GNER defaulted and has now been effectively barred from the UK rail business, Adonis said: "A company which had defaulted in the way National Express now intends would not have pre-qualifed for any previous franchises let by the Department. It is simply unacceptable to reap the benefits of contracts when times are good, only to walk away from them when times become more challenging."
National Express hit back, saying leading counsel has told it that the DfT cannot exercise a "cross-default" and strip it of its other franchises.
It said: "It has been recognised that the challenges facing East Coast are purely financial and brought about by the economic downturn. National Express believes that the Secretary of State would not be permitted to execute the right of cross-default.
"Cross-default can only be applied where the Secretary of State can reasonably expect the default under one franchise within an owning group has a material impact on the other franchises within that group."
Reader views (8)
Latest newsheet from C2C mentions they are going to e-paint the trains into National Express white!
Now thinking white is a suitable colour for trains shows how inexperienced they are.
(ps Del Boy has got some white paint handy for painting chinese restaurants though not as energy effiecient as Luminous paint was ....)
Remember NX also gave for GER rail from Liverpool Street name ONE - Not realising the fun announcements like the One service at one minute past one to Enfield Town is now on platform one!
Yet the one thing National Express cant provide is a One-derful service!
- Melvyn Windebank, Canvey Island, Essex
Strange that the transport minister Lord Adonis, can get away with the announcement without fear of challenge from the so-called democratically elected house.
Un-elected Government Ministers making decisions on behalf of the nation, shows the real state of our democracy – there is none.
- Ian, Reading, England
worried about their bonuses then.
- Alan R, Luton Bedfordshire
We stopped travelling by train when National Express increased both ticket prices and station car parking. It now costs £10 per day just to park - hardly an encouraging to use the railways. There has to be a complete re-think of public transport policy in this country.
- Steve Allen, Grantham
I've got not one drop of sympathy for them. They came to get their snout in the trough and they screwed it up royally, by vandalising what was a good service under GNER. Abolition of restaurant coaches, downgraded First Class, seat reservation charges, historic stations like York and Newcastle potentially being spoiled by automatic gates, and all this amid skyrocketing fares.
The British public have voted with their feet. Good Riddance to this bunch of cowboys.
- Ks185, Glasgow, Scotland
Totally agree and do hope the Government does something about the unfair price hikes - two increases over the past six months for daytime travellers, in top of already rip-off ticket prices.
- Malcolm Burgess, Brentwood, Essex
Best of luck in the UAE Mr Bowker. Your contribution to the UK rail sector on the value side is not evident and thanks for leaving us taxpayers with the £1.2 billion bill for the bidding mistake you led you arrogant man.
Is the Govt seriously going to let all the chief executives in the bank sector and likes of Bowker here just walk on to the next role without any sort of censure?
- Jim, London
VERY IMPRESSED by Gordon Brown taking on these goliath faceless companies who keep ripping off the poor consumer and think no one can stop them!Carry on please thats what governments are for! WELL DONE.Next-gas,elec,water comps.perhaps? Would win MILLIONS of votes!
- Serafim, london
