From The Economist; February 8, 2018
THE East Coast mainline is Britain’s most scenic long-distance railway. Connecting London to Edinburgh and the Scottish highlands, the view of Durham’s medieval castle from the line’s tall viaduct running through the city is one of Europe’s best. The business of running the line’s finances is less pretty, however.
On February 5th Chris Grayling, the transport secretary, announced that Virgin East Coast, the franchisee that operates trains on the line for the government, is near collapse. Passenger numbers and revenues have undershot forecasts since the eight-year contract began in 2015. As a result, the firm is running out of money. Virgin East Coast is not the only franchisee that has faced financial ruin running the line. Previous operators forfeited their contracts in 2007 and 2009 after revenues failed to meet forecasts. But this time the crisis comes at an awkward moment for the government. Rising rail fares and poor service quality on some lines have dented public support for rail privatisation. Some 60% of Britons now support a return to state ownership, according to a poll published last month by Sky, a broadcaster. The Labour Party will use any sign of a bail-out as ammunition for its campaign to renationalise the railways.
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