What does the future hold for York-based rail GNER?

GNER bosses are tight-lipped about speculation surrounding the company's future, refusing to join the debate about whether its East Coast mainline franchise should be handed back to the Government.

But the industry's biggest union, the RMT (Rail Maritime and Transport Union), has made the rallying call in a bid to stop jobs and rail services falling victim to the cash troubles engulfing GNER's Bermuda-registered parent company, SeaContainers.

SeaContainers is struggling to find ways of paying $394 million worth of debts.

As previously reported in The Press, SeaContainers is considering the future of GNER and its flagship franchise after revenue was seriously affected by the London train bombings and the impact on passengers' travel habits.

Scenarios include cutting costs and jobs at GNER while increasing rail ticket charges; selling off GNER; attempting to renegotiate the £1.3 billion ten-year franchise; or handing the franchise back to the Government.

RMT general secretary Bob Crow said: "The priority is to ensure our members' jobs and the services they provide do not fall victim to SeaContainers' deepening financial crisis."

Sea- Containers' troubles follow its success with its £1.3 billion offer for the ten-year franchise for GNER last May, which was at least £300 million higher than any rival bid.

Mr Crow added: "We warned when the new GNER franchise was let that the enormous price-tag raised the threat of service cuts, massive fares rises and a squeeze on jobs and conditions, and it gives no pleasure to be proved right.

"It is absolute madness to allow a supposedly profitable franchise to be butchered.

"We hope passengers will also resist the attacks on their services and support the only sensible course, which is to bring the franchise back into the public sector, and keep it there."

Frank Ward, of the TSSA - an independent trade union for the transport and travel trade industries - said the eyes of the industry were on how the crisis was resolved.

He said: "The Department for Transport have indicated they will not renegotiate the franchise.

"If SeaContainers hold on to the franchise, they will have to cut costs dramatically.

"Jobs will have to go. The passengers and workers will end up picking up the tab.

"This is a very big issue. The whole industry is watching to see how the Government will react.

"This was the flagship franchise to show how it should be done. All of a sudden, it is in difficulty."

He warned that other franchise holders also affected by factors beyond their control might seek to renegotiate their agreements if the bid to change the GNER franchise terms was successful.

"The Government has to be very careful. But at some stage someone needs to make a decision. Either the DfT say they will renegotiate or take the franchise back, or SeaContainers needs to decide how they will go forward."

City of York MP Hugh Bayley said: "GNER has a contractual obligation to deliver the services it promised in its franchise application and I expect them to do so.

"It would be wrong if funds were taken from GNER to help their parent company SeaContainers address their financial difficulties and the Department for Transport will be watching carefully to make sure this doesn't happen.

"The RMT are wrong to talk down GNER. They should be arguing for GNER to provide an ever-improving service to passengers on the East Coast line."

He added GNER had provided a good service and was "a crucially important provider of jobs in York".

City of York Council leader Steve Galloway, said the RMT's response was a "knee jerk reaction" to the current difficulties, adding any moves towards renationalisation of the rail industry would take years.

"People will have every sympathy with the view that the rail infrastructure should be in the hands of a publicly-accountable body. But the trains on the lines are a different matter.

"I suspect we have passed the stage where it is practical or, from a national economic point, possible to do that."

A simpler solution would be to allow more flexibility over franchise terms to take into account external factors such as the effects of terrorist activities on passengers' desire to travel, he said.

Peter Davies, chairman of the Yorkshire branch of Rail Future, which campaigns for better rail services, said moves to renationalise part of the network would involve examining legislation and be "very expensive, time-consuming and impractical".

"Once we do that, it is possible other operating companies would wish to do the same," he said.

"GNER has done an excellent job. They won the franchise last year. I hope they will keep it going."

Guy Dangerfield, from independent rail consumer watchdog Passenger Focus, said there was no reason to bring GNER's franchise under public control, considering the investment GNER had committed under its franchise agreement.

He also questioned whether a state-owned company would achieve the same amount of investment that GNER was proposing to make.

"I don't know whether GNER will ultimately be forced to make service cuts that would lead to front-line job cuts," he said.

But there was no guarantee that a state-owned company would not have to make the same decisions, or go even further, he warned.

East coast line on track for a brighter future

GNER is committed to investing millions of pounds over the coming years to build on the success already achieved while being in York.

Up to £75 million will be spent on transforming its diesel trains over the next two years by rebuilding interiors based on the Mallard design and new engines delivering cleaner and greener performance.

GNER is also creating Britain's first all-WiFi train fleet - enabling passengers to access the Internet on board without a cable - with completion expected by the end of next month.

The company was the first train operator in the UK to provide uninterrupted internet connection for passengers while travelling, and will run the world's biggest fleet of WiFi-equipped carriages when the project is complete.

Also planned is a £25 million station modernisation programme, including 900 extra car parking spaces, 400 extra cycle spaces, extra customer information points and further access improvements.

York Station will benefit from further improvements, including extra retail and refreshment facilities and better integration between rail and other forms of transport.

GNER has delivered a new travel centre at York, two refurbished passenger lounges, new customer information screens, extra CCTV and a rebuilt subway.

There are also new toilets and extra cycle storage facilities, and a direct footbridge link to the Leeman Road/ National Railway Museum area west of the station.

Another £30 million was spent on rebuilding the electric trains to create the Mallard fleet, with 302 carriages rebuilt in the biggest project of its kind undertaken in Britain.

The trains offer extra legroom, brighter, lighter interiors, new toilets and ergonomically-designed seats with individual power sockets and three wheelchair spaces - plus a cafe-bar and on weekdays, an award-winning onboard restaurant.

GNER has delivered a 23 per cent increase in train services on the East Coast Main Line, to 123 services a day - York has benefited from nine extra weekday trains to and from London King's Cross.