Financial speculators driving up rail costs
Two days after fares bombshell RMT analysis shows financial speculators driving up costs
In a tersely worded press statement the RMT rail union is hotly disputing the claims of the Rail Delivery Group that only 3% of total fares revenue is remitted to the TOCS (Train Operating Companies), RMT claims that a detailed analysis shows that 'financial speculators' also collect revenues from the UK rail industry.
What the Union terms a 'rail rip-off' whereas others may consider the charges are train leasing and operating costs. The Union maintains this comes 'in addition to the millions stripped out by train operating companies and on top of the vast sums stripped out by the private contractors working on the rail infrastructure'.
They point to Government figures issued by the Office of Rail & Road, 12% of fare money - out of a total fare income £9.2bn - was spent on leasing trains from the private 3 rolling stock operating companies.
RMT claims the same data shows these 3 companies received £1.4 billion in 2015-16, but only experienced costs of £1.2 billion during the same period.
This equates says the Union, to a profit margin (or surplus) of 16.7%, £200 million, ie accounts for over 2p of every pound spent on a ticket, or the equivalent of a fare cut of 2.1% could be achieved if the privately financed and owned rolling stock was purchased and taken into public ownership.
The RMT says the rolling stock “market” has been investigated a number of times on lack of competition issues in what they assert is 'basically a highly-secretive, government-sponsored racket'.
The vast majority of rolling stock in the UK is owned by overseas - backed operating companies, the Unins says this highlights how little capital investment train operating companies (usually on short operating contracts) actually make themselves:
Angel Trains is owned by a consortium of infrastructure and pensions investors including AMP Capital Investors and Canadian pension investor PSP Investments.
Porterbrook owned by a consortium of infrastructure investors including Germany’s Allianz Capital Partners, Australian asset manager Hastings, Canada's Alberta Investment Management Corporation and EDF Invest of France
Eversholt Rail Group owned by CK Investments is jointly owned by Cheung Kong Infrastructure Holdings Ltd and Cheung Kong (Holdings) Ltd two investment vehicles backed by Li Ka-shing, one of Asia's richest men, says the Union.
In a forthright comment, a clearly angry RMT General Secretary Mick Cash said: “If fare payers thought it was just the private rail companies that were bleeding them dry they ought to take a look at the shady world of the rolling stock companies. These overseas outfits are creaming our railways for fat profits and have complete control over the crucial fleet operations and use that power to exploit the British passenger in what is nothing less than a government-sponsored racket.
“When RMT talks about public ownership we mean sweeping all these chancers and speculators off our railways and re-investing the fat sums they are pocketing back into services. If we took this mob out of the equation we could cut fares, keep the guards and invest in the modernisation and upgrade works that our railways are crying out for.”
There was no immediate comment from Number 10....
RMT source material:
1. UK rail industry financial information 2015-16 (22 February 2017) http://orr.gov.uk/statistics/published-stats/uk-rail-industry-financial-information/uk-rail-industry-financial-information-2015-16
2. House of Commons Library http://researchbriefings.files.parliament.uk/documents/SN03146/SN03146.pdf ;
“The bulk of the rolling stock (trains) that run on the railways are owned by three private companies (rolling stock leasing companies, or ROSCOs) – Angel, Eversholt and Porterbrook”
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