The Bermuda-based parent company of GNER which runs mainline East Coast rail services through Peterborough has filed for “bankruptcy protection” this morning.
Operators GNER are desperately trying to say that services will not be affected HERE, but the situation clearly throws into doubt the future of GNER, which operates trains between London and Edinburgh.
Sea Containers was widely thought to have overpaid in a £1.3 billion deal earlier this year to secure the East Coast franchise and is thought to have been working on plans to slash costs, leading to hundreds of job losses among its 3,000 GNER workforce HERE.
Sea Containers is seeking what is known as chapter 11 protection from its creditors.
City sources have also speculated GNER could be sold. But there are likely to be few potential buyers eager to buy a struggling train operating company – and any buyer would surely attempt to renegotiate the franchise at a lower rate.
It's another indictment of the totally incompetent way the Tories sold off and fragmented our railways in the dying days of the Major Government.
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This is a great pity, since service-wise (though not cost-wise) GNER is one of the better train operating companies. Their trains - the most modern to have been inherited from BR, of course - are clean and bright and fast and much has been spent at several stations (Doncaster at the moment), but their fares are high. I suppose service would plummet if all those staff cuts do occur.
It just goes to show that enterprise does not always produce the best product at the best price, doesn't it?
There are two stands to this.
The parent company is in big financial trouble with unknown consequences for their reasonably successful GNER subsidiary.
Then there is the top price GNER are paying to extend their East Coast Main Line franchise.
GNER bid on the basis that they would have a near-monopoly.
Since then, the rail regulator has undermined GNER's finances by recently making the unexpected (and very welcome) decision to permit rival operators to launch express trains from Sunderland and Teeside to Kings Cross.
Open market franchise bidding and politically determined allocation of scarce track resources do not sit comfortably. GNER are understandably even further up the creek.
Phil says that John Major privatised the railways all wrong. True.
But stategic rail planning in the last nine Labour years has been exceptionally poor. Only in Scotland and Wales have new projects gone ahead...oh, and the prestige Channel Tunnel Rail Link, of course.
Come on Phil - the last Tory General Election victory was when I was at school in 1992. Just how long does your party need to sort out issues it believes were caused by the previous administration?
I assume its the Tories fault that GNER have doubled the price to park at car parks they run?
Jonathan:
You don't have to believe me about the Tories cocking up rail privatisation.
Listen to Cameron. He's already apologised for it - he'll be air-brushing Thatcher out next!!
Come on "pull-the-other-one" Phil.
Blame the Tories! Give it break. You are starting to sound like a stuck record.
Lincolnshire County Council recently passed a resolution condeming GNER and First Capital Connect for the increase in rail charges and they put the blame for the fiasco surrounding GNER where it belonged - with this Labour Government.
That resolution was opposed by the Labour Group. The Labour Group put forward two amendments:
The first amendment moved by Cllr Philip Dilks (Deeping St James) and seconded by Labour Leader Cllr Robert Parker (Lincoln West) sought to remove any blame attached to the Labour Government for the award of the franchises, and to commend them for the re-nationalisation of the railtrack structure.
The second amendment, moved by Cllr Neville Jackson (Lincoln Park) sought to substitute the motion for debate with a new motion that was one in support of “Clause 4” of the Old Labour constitution.
Both of these amendments were defeated when put to the vote.
The Labour response, led by "Pull-the-other-one" Phil, to the main motion was initially to make a joke of the financial pressures suffered by ordinary commuters as a result of the Labour Governments award and mismanagement of the rail franchises.
You sought to make a joke of the economic hardship suffered by commuters - and that no doubt will be remembered come the next election.
You are well aware "Pull-the-other-one" Phil, that Alaistair Darling, the then Transport Secretary was warned by his civil servants that GNER was financially weak and that its bid was financially unviable.
Nevertheless, as part of a policy of increased indirect taxation - of which there have been over 150 since Labour came to power - Alaistair Darling ignored the advice of his officers and went ahead and and awarded the franchise to GNER.
Nothing to do with the Tories "Pull-the-other-one" Phil as you well know - but then you are a paid apologist for the Labour Party and a lickspittle for those who took us into an illegal war in Iraq.
We do'nt believe you Phil, neither do we believe Tony, Gordon, Alan, et al.
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