State owned operator pays out record premium
State-run train operator East Coast paid a record £202.8m premium last year (2012: £188.6m). The report and financial statements released by Directly Operated Railways Ltd (its state-owned holding company) for the financial year to 31 March 2013, show that turnover increased 4.2% to £693.8m (2012: £665.8m). This figure also includes the proceeds from parking, catering and commissions from other operators’ ticket sales, though passenger revenues remain the main source.
However, operating profit after payment of the DfT premium, but before tax, was down 16.7% to £5.9m(2012: £7.1m).
East Coast has recorded an annual 4.3% passenger revenue growth rate, but it’s less than the national 4.9% long-distance average. The company attributes the shortfall to regional factors, as well as the impact of open access operators (there are two on the ECML).
DOR assumed control of the East Coast franchise after National Express pulled out in November 2009. It is now one of the most profitable in the country: However, the government is determined to return it to the private sector when the franchise expires in February 2015.