As the parent company of York-based rail giant GNER admits it is in financial trouble, what could this mean to the firm and the millions of people who use its services? Business editor RON GODFREY looks at the "what ifs".

BOSSES at Sea Containers, the troubled parent company of GNER, refuse to speculate on its future.

It clearly would not be good public relations to soothsay beyond either its plans to sell its ferry business in order to take the edge off its £1.2 billion worth of debts, or its latest negotiations with the banks and other creditors to buy time. It is upbeat.

But that has not stopped the trade unions, the passenger organisations and other rail companies who were rival bidders for the East Coast Main Line franchise from asking a series of "what if" questions.

What if Sea Containers metaphorically "sinks"? What if GNER cannot afford to carry out its rigid payment schedule negotiated with the Government - a graduated sum of £1.3 billion into Government coffers over ten years? What if Sea Containers eventually sells GNER in a last bid to stay afloat? What if one of the buyers was say VirginRail or FirstGroup, which were itching to get their hands on the franchise? What if the Government is forced to renationalise services on the East Coast Main Line?

Sea Containers does not deny that there are serious problems. A statement on its own website on why the group was delaying filing its annual report, concedes that it expects its independent auditors to raise "substantial doubt" about its ability to continue as a going concern.

But GNER would only say: "It is business as usual."

A spokeswoman in the London office of Sea Containers said: "GNER is performing extremely well and delivering on all its franchise commitments. Last year, it carried 17 million passengers and achieved customer satisfaction of 85 per cent. It has separate banking arrangements and is ring fenced as much as any wholly-owned subsidiary can be."

The Department for Transport (DfT) said: "Our franchise agreement is with GNER and not with Sea Containers. As you would expect, we monitor the finances of all operating companies.

"In all our franchise agreements are provisions that the trains will continue to run in all reasonable circumstances. In the legislation there is the ability for the department to act as an operator of last resort."

Another way of putting that is to say that the service could be renationalised, something the Rail Maritime and Transport Union (RMT), which has nearly 2,000 members, about 600 of them working on the East Coast Main Line, would welcome.

Its spokesman said: "If there is any suggestion that those ultimately running GNER would not be able to fulfil its obligations, then it should be taken back in-house and run directly by the Government, as they did with South Eastern trains."

Guy Dangerfield, passenger link manager for Passenger Focus, the statutory passenger "watchdog", said that Sea Containers would be perfectly at liberty to put GNER up for sale, but any deal involving a change in controlling interest would have to be cleared first with the DfT.

He said it was possible that GNER could continue without the parent company should the circumstances demand it. "I don't see passengers being affected."

Meanwhile, the speculation continues, especially as only last month Christopher Garnett, the GNER chief executive, spoke of "long-term consequences" for his company as a result of a decision by the Office of Rail Regulation to allow rival York firm Grand Central to run trains on the East Coast Main Line.

Updated: 09:46 Thursday, May 04, 2006