Privateers make £88 million in 6 months

Privateers make £88 million in 6 months

21 May 2021

RMT Press Office:

‘Great British Railways?’ – Privateers make £88 million in 6 months out of emergency Covid–19 taxpayers’ funding – around of half of which will go overseas.

RAIL UNION RMT warned today that private train operating companies are looking at a future of easy guaranteed profits at taxpayers’ expense while staff face pay and job cuts, after the union published research showing that rail privateers made £88 million in management fees in just 6 months during the first bailout of the railways between March and September 2020, around half of which could flow overseas to fund other countries’ rail networks.

Figures quietly published by the DfT on 12 May this year show that for the 6-month period of the Emergency Measures Agreements, the first bailout of the railway, the private train operators will be paid £88.8 million in management fees. Because of the level of foreign ownership of the private train operating companies, with many companies wholly or partly owned by foreign state-owned railways, around half of this money may leave these shores entirely in dividend payments to foreign parent companies.

Figures are not yet available for the fees that may be paid through the second bailouts, the ERMAs. The management fee structure being used for the EMAs and ERMAs is basically the same as that proposed through the government’s new National Contracts, the first of which was announced yesterday on the same day as the government announced its White paper for reform.

RMT warned that this flow of public money out of the industry and overseas was the shape of things to come.

RMT General Secretary Mick Lynch said:

“For all the showbiz fanfare around Great British Railways, the truth is that behind all the government’s grease paint and jazz hands it’s still private companies looting profits from our railways with the only difference being that now they don’t have to take any risks for their reward.”

“Not only do we once again see pandemic profiteering, but we are also faced with the bitter irony that the Great British Taxpayer is in fact helping to send money abroad to fund Great Overseas Railways.”

Notes for editors
 
Table showing DfT management fee payments to passenger rail operators under emergency agreements, March to September 2020
 
Operator
Total fees payable
Owner
Amount of profit available for export
Chiltern
£1,885,000
Arriva (Deutsche Bahn)
£1,885,000
Cross Country
£5,386,000
Deutsche Bahn
£5,386,000
East Midlands
£4,798,000
Abellio (Dutch state railways)
£4,798,000
East Anglia
£6,169,000
Abellio (Dutch state railways)
£6,169,000
Essex Thameside
£1,428,000
Trenitalia (Italian state railways)
£1,428,000
Great Western
£13,911,000
FirstGroup
£0
South Eastern
£7,973,000
Govia (comprising Go-ahead 65% and Keolis 35%)
£2,790,550
South Western
£10,033,000
First (70%)/MTR (Chinese state, 30%)
£3,009,900
Thameslink, Southern and Great Northern
£17,831,000
Govia (comprising Go-ahead 65% and Keolis 35%)
£6,240,850
TransPennine Express
£2,876,000
FirstGroup
£0
West Coast Partnership
£11,313,000
First (65%) Trenitalia (35%
£3,959,550
West Midlands
£5,187,000
Dutch State railways and two Japanese private firms
£5,187,000
Total
£88,790,000
 
£40,853,850
 
  • The data on management fees was published, quietly, on 12 May. DfT payments to passenger rail operators under emergency agreements - GOV.UK (www.gov.uk)
  • The figures for profits available for export were calculated from the shares of foreign ownership. Where a company is 100% foreign owned it is assumed that all that profit can be paid up to the parent. Where it is 35% foreign owned, the figure has been calculated on 35% of the management fee.

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Tagged with: Great British Railways, Covid-19, DfT, Department for Transport, EMA