A SENIOR rail chief has declared the North East needs new trains as the Department for Transport faces a cash squeeze.
Elaine Holt, chairman of state-owned rail company East Coast, told The Journal new trains were needed to cope with rising passenger numbers and the needs of travellers in the coming years.
Trains in the current East Coast fleet, which link the region with London and Scotland, are up to 30 years old but plans to replace them are in limbo.
Former Transport Secretary Lord Adonis ordered a “value for money” review into £7.5bn plans for a fleet of “Super Express Trains” – which could be assembled in Gateshead with hundreds of jobs created.
That report is due before Philip Hammond, the new Conservative Transport Secretary, by the end of the month – with plans prepared about running the current fleet beyond 2019.
It comes as the respected Institute for Fiscal Studies (IFS) said the new Liberal Conservative Government’s plans for real increases in NHS spending and real rises in overseas aid put pressure on other areas.
“This suggests an intense squeeze on the budgets of other Whitehall departments in the spending review due this autumn,” said IFS director Robert Chote.
The DfT’s budget have also been thrown into chaos by the failure of two East Coast franchises under Labour, which resulted in services nationalised six months ago.
Private operator National Express secured the flagship franchise with a promise of massive payments to the Government. But the company ran into serious financial problems and the deal was torn up.
Figures from the East Coast rail company show it will pay a “premium” to the Government totaling £433m between 2009-10 and 2011-12 – compared to the £766.3m pledged by National Express.
Elaine Holt said it had been a “very smooth transition” from National Express to East Coast trains.
She stressed the company was on a “stable financial footing” and investing in the business over the next two years. But Mrs Holt said: “Clearly we are providing a different level of premium.”
She revealed the company has submitted evidence to the review into the Super Express Train programme.
“The key message is this is a growing railway and if you look to the future there will be many more people travelling with us. So we need to make sure we have the capacity and seats available. We are running some trains which are fairly old. We need to have a fleet able to cope with growth.” said Mrs Holt.
But the rail executive promised action in the coming months to improve reliability and catering, although services would return to the private sector despite calls for them to remain in public hands.
“I think what people are telling us is they are pleased to see the focus on customer services and the investment recognised. I think it is welcome delivering on the ground,” she said.
But Mrs Holt said European Union (EU) rules meant they had to go back to the private sector in two years.
Her comments came as Transport Secretary Philip Hammond said his department would have to “take its share of the burden in dealing with the fiscal crisis”.
For William Green's blog, go to www.journallive.co.uk/blogs