National Express flogs C2C network to Italian firm keen to get foothold in UK rail market
Transport giant National Express has exited the UK rail market, flogging its final franchise to an Italian firm with grand designs to take control of Britain's rail networks.
The C2C franchise, which operates trains in East London and South Essex across 26 stations, has been sold to Trenitalia in a deal worth £70m.
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National Express stressed there are considerable liabilities attached to the the franchise that runs until 2029 and said it only expects to make a "small profit" as a result of the transaction.
The sale ends the FTSE 250 firm's association with the network which stretches back to the turn of the millennium. And during a tumultuous time for Britain's rail network, the deal is the completion of a strategic rethink for the firm.
Chief exec Dean Finch said:
For National Express, while not ruling out participating in future UK rail bids, this allows us to pursue further growth opportunities in the markets where we have seen strong returns in the recent years.
The firm said growth opportunities included exploring new ventures in North America and continental Europe, which the firm said had exhibited "significant growth" in recent years.
Forza azzurri
In December 2015, the Department for Transport (DfT) granted Trenitalia a "PQQ passport" enabling the firm to bid to operate franchises in the UK. And the C2C deal is anticipated to be the first foray of many by the Italian firm.
Trenitalia chief exec Barbara Morgante said:
We see significant chances to invest in UK Rail and this in principle agreement with National Express allows us to foster these ambitions
We are also closely monitoring the Railways Franchising Programme as we intend to participate in tenders issued by the DfT to strengthen our presence in UK.
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There are several overseas operators already operating in the UK rail market either through shared ownership of joint ventures or investments in UK subsidiaries.
Govia, the owner of beleaguered Southern rail, is part owned by French group Keolis, while Arriva is a subsidiary of German firm Deutsche Bahn.
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Although C2C stressed it has the best performance in the UK rail industry – delivering 97.5 per cent of its trains on time and being voted London's best commuter operator according to consumer group Which – unions hit out at the news.
"This is yet another part of Britain's rail operations being sold off to a European state-owned outfit," said Rail, Maritime and Transport union boss Mick Cash. "This time it's Trenitalia, an Italian operator, that is being given an open door to plunder passengers and the public purse to subsidise rail services in their own country."