Soaring Subsidy For South West Trains Is 'Extraordinary' Says Hampshire MEP (Eastleigh Liberal Democrats)

Eastleigh Liberal Democrats <enquiries@eastleighlibdems.org.uk>

Soaring Subsidy For South West Trains Is 'Extraordinary' Says Hampshire MEP

June 13, 2003 9:00 AM

Hampshire MEP Chris Huhne today slammed the soaraway subsidy for South West trains and said that the Strategic Rail Authority was spending taxpayers' money as if it were going out of fashion.

The South West trains subsidy will rise from £48 million last year to 'an extraordinary £170 million a year'. This is meant to be for running the services from London Waterloo to Guildford, Reading, Southampton, Exeter and Weymouth.

'This 250 per cent rise is meant to cover the introduction of the new Desiro rolling stock to replace the old slam-door trains, but why should the taxpayer fund most of the leasing cost when South West trains stands to gain half of the profit?' said Mr Huhne.

'And why with such a big increase in the subsidy is a minister not announcing this to parliament, rather than the Strategic Rail Authority sneaking it out in the small print of the franchise extension for South West Trains? This is new Labour spin-doctoring at its worst'

'This looks like a sweetheart deal where the taxpayer funds the risk, and the shareholders of Stagecoach - the holding company for South West trains - get the reward. I'm all in favour of high rewards for high risks, but this looks like another fat cat contract'.

Under the extension of South West Trains franchise to 2007, the company will share any profit above £27 million year on a fifty-fifty basis with the Strategic Rail Authority. Last year, Stagecoach made £30 million from South West Trains.

Under the terms of the franchise extension, the new Siemens Desiro carriages will be introduced over the next two years to replace the existing 576 slam door carriages, and there will be upgraded depots including a new facility at Northam. There will be more CCTV at stations, improved train cleaning and an accelerated station painting programme.

'The improvements in services for passengers will be very welcome when they finally come, but they are happening at an extraordinary price to taxpayers that makes me wonder whether the SRA has driven a hard enough bargain with the legendary Stagecoach boss Brian Souter' said Mr Huhne.

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