Has Greater Anglia paid too much to run trains on this region's network
PUBLISHED: 09:44 11 October 2017 | UPDATED: 09:44 11 October 2017
New figures from the government's rail watchdog has prompted fears that Greater Anglia may have paid the government too much to run trains across the region.
The new statistics from the Office of Road and Rail showed that the number of passengers using Greater Anglia trains has remained the same over the last two years – but when Abellio bid to retain the franchise last year its figures assumed that the passenger growth of the last 20 years would continue.
What is potentially more worrying is that sales of season tickets fell last year for the first time since 1995. Companies like Greater Anglia rely on season tickets for a substantial amount of their revenue – and it is a guaranteed figure they can plan for.
Over-estimated ticket revenue has caused problems for rail companies in the past – both GNER and National Express got into financial difficulties with the East Coast franchise from London to Newcastle and Edinburgh and current operators Stagecoach/Virgin are negotiating an amended franchise with the Department for Transport.
Rail expert Christian Wolmar, who has written several books on the industry, said the season ticket revenue was vital to a company like Greater Anglia: “That is the money that the company relies on, it is a guaranteed sum coming in all the time and if that falls then there could be problems.
“I don’t think there will be any companies defaulting, the Department for Transport will not allow that, but there could be pressure to re-negotiate franchise deals.”
Greater Anglia was awarded the franchise to run trains in the region until 2025. It committed to paying £3.7bn to the Treasury and spending £1.4bn on new trains which are due to be introduced from 2019.
Jonathan Denby from Greater Anglia said this region was fundamentally different to the East Coast route because a substantial proportion of its passengers were season ticket holders.
He said: “The passenger figures do not vary that much. And we know there is going to be population growth in the region with 10,000 new homes coming to Chelmsford and 18,000 to Colchester in the next few years – and there are many more elsewhere across the network we serve.”