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| National Express loses rail route | National Express loses rail route |
| (10 minutes later) | |
| The government is to take the East Coast rail service, run by National Express, into public ownership. | The government is to take the East Coast rail service, run by National Express, into public ownership. |
| The troubled rail franchise, which is expected to have lost £20m in the first half of the year, is suffering from slumping passenger numbers. | The troubled rail franchise, which is expected to have lost £20m in the first half of the year, is suffering from slumping passenger numbers. |
| Ministers have refused the company's requests for its contract with the government to be renegotiated. | Ministers have refused the company's requests for its contract with the government to be renegotiated. |
| The Department for Transport said that all East Coast services would continue and that tickets would be honoured. | The Department for Transport said that all East Coast services would continue and that tickets would be honoured. |
| Existing operational staff will transfer to the new state company which will be set up to operate the route. | Existing operational staff will transfer to the new state company which will be set up to operate the route. |
| The government added it intended to put the franchise out for tender from late next year. | The government added it intended to put the franchise out for tender from late next year. |
| 'No bail-out' | 'No bail-out' |
| National Express won the franchise from GNER in 2007. | National Express won the franchise from GNER in 2007. |
| It agreed to pay the government £1.4bn to run the East Coast main line, which runs between Edinburgh and London, until 2015. | It agreed to pay the government £1.4bn to run the East Coast main line, which runs between Edinburgh and London, until 2015. |
| At the time, many rail analysts said it had paid too much for the franchise. | At the time, many rail analysts said it had paid too much for the franchise. |
| FROM THE TODAY PROGRAMME More from Today programme | FROM THE TODAY PROGRAMME More from Today programme |
| Now National Express has said it will walk away from the loss-making route after failing to alter the terms of its agreement - a step which prompted the government to intervene. | Now National Express has said it will walk away from the loss-making route after failing to alter the terms of its agreement - a step which prompted the government to intervene. |
| Transport Secretary Lord Adonis said: "The government is not prepared to renegotiate rail franchises, because I'm simply not prepared to bail out companies that are unable to meet their commitments. | Transport Secretary Lord Adonis said: "The government is not prepared to renegotiate rail franchises, because I'm simply not prepared to bail out companies that are unable to meet their commitments. |
| "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." | "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." |
| In a statement, the government added that it believed it had also had grounds to end National Express's two other rail franchises - East Anglia and c2c. | In a statement, the government added that it believed it had also had grounds to end National Express's two other rail franchises - East Anglia and c2c. |
| But the company said it felt the government had "no grounds" to do this and would challenge any such attempt in court. | But the company said it felt the government had "no grounds" to do this and would challenge any such attempt in court. |
| It added that it did not expect the any losses from the East Coast franchise could be recouped from National Express. | It added that it did not expect the any losses from the East Coast franchise could be recouped from National Express. |
| Debt pile | Debt pile |
| Richard Bowker, the chief executive of National Express, has confirmed he is to leave the firm, to become chief executive of Union Railway in the United Arab Emirates. | Richard Bowker, the chief executive of National Express, has confirmed he is to leave the firm, to become chief executive of Union Railway in the United Arab Emirates. |
| In a trading statement, National Express said that the "challenging economic environment" meant it was seeing fewer passengers on the East Coast Mainline and "significant" levels of people downgrading from first-class and full fares. | In a trading statement, National Express said that the "challenging economic environment" meant it was seeing fewer passengers on the East Coast Mainline and "significant" levels of people downgrading from first-class and full fares. |
| It doesn't seem to me right that the taxpayer should pick up the loss from one [franchise] and leave the profits from the other two with National Express, Norman BakerLiberal Democrat transport spokesman | It doesn't seem to me right that the taxpayer should pick up the loss from one [franchise] and leave the profits from the other two with National Express, Norman BakerLiberal Democrat transport spokesman |
| The firm is trying to reduce a debt pile of about £1.2bn. Earlier this week, rival transport company FirstGroup said a takeover approach made for National Express had been rejected. | The firm is trying to reduce a debt pile of about £1.2bn. Earlier this week, rival transport company FirstGroup said a takeover approach made for National Express had been rejected. |
| Cuts have been made in dividend payouts to shareholders, while 750 jobs have also been lost. | Cuts have been made in dividend payouts to shareholders, while 750 jobs have also been lost. |
| Last month, the company started charging passengers for reserving a seat on its East Coast and East Anglia franchises. | Last month, the company started charging passengers for reserving a seat on its East Coast and East Anglia franchises. |
| 'Not right' | 'Not right' |
| Liberal Democrat transport spokesman Norman Baker said that National Express should not be allowed to run any other train services. | Liberal Democrat transport spokesman Norman Baker said that National Express should not be allowed to run any other train services. |
| "It doesn't seem to me right that the taxpayer should pick up the loss from one and leave the profits from the other two with National Express," he told the BBC. | "It doesn't seem to me right that the taxpayer should pick up the loss from one and leave the profits from the other two with National Express," he told the BBC. |
| He added that by leaving the East Coast line in public hands would provide a comparator which would be "useful in driving up standards across the whole industry." | He added that by leaving the East Coast line in public hands would provide a comparator which would be "useful in driving up standards across the whole industry." |
| The transport union, the RMT, welcomed the development and also called for the franchise to remain in government hands permanently. | The transport union, the RMT, welcomed the development and also called for the franchise to remain in government hands permanently. |
| "It should be a long-term solution to the chaos that privatisation has brought to the UK's most lucrative rail franchise," said RMT General Secretary Bob Crow. | "It should be a long-term solution to the chaos that privatisation has brought to the UK's most lucrative rail franchise," said RMT General Secretary Bob Crow. |
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