National Express Loses East Coast Snailway
The Government has terminated National Express's franchise of the East Coast Mainline after the company struggled to attract passengers.
The troubled operator made a £20 million loss in the first half of this year, as savvy passengers hunted out bargain advance-purchase fares on the internet.
According to the BBC National Express tried to buy its way out of its 8-year franchise to run passenger trains on the main east coast route between London Kings Cross, Edinburgh and Aberdeen.
Transport Minister Lord Adonis is said to have rejected the company's £100 million severance offer as a matter of principle.
"They might well have wanted to pay a certain sum of money, in return for an agreement that they don't have to meet much larger obligations over a long period of time," Lord Adonis said.
"If I had agreed to that, the rail franchising system as it now exists, and is broadly running successfully, would have collapsed."
National Express took over the franchise from former operator GNER in 2007. It agreed to pay the Government £1.4 billion to run east coast services until 2015.
The Government could now strip National Express of its two other rail franchises - East Anglia and c2c.
Richard Bowker, chief executive of National Express, announced his resignation from the company on Tuesday evening.
The troubled operator made a £20 million loss in the first half of this year, as savvy passengers hunted out bargain advance-purchase fares on the internet.
According to the BBC National Express tried to buy its way out of its 8-year franchise to run passenger trains on the main east coast route between London Kings Cross, Edinburgh and Aberdeen.
Transport Minister Lord Adonis is said to have rejected the company's £100 million severance offer as a matter of principle.
"They might well have wanted to pay a certain sum of money, in return for an agreement that they don't have to meet much larger obligations over a long period of time," Lord Adonis said.
"If I had agreed to that, the rail franchising system as it now exists, and is broadly running successfully, would have collapsed."
National Express took over the franchise from former operator GNER in 2007. It agreed to pay the Government £1.4 billion to run east coast services until 2015.
The Government could now strip National Express of its two other rail franchises - East Anglia and c2c.
Richard Bowker, chief executive of National Express, announced his resignation from the company on Tuesday evening.
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