Private rail firms make £3.5 billion profit

Rail firms' £3.5billion profit despite passengers' fury at dire service

Private train operators have creamed off £3.5 billion from running our railways over the past 10 years.

These gigantic profits come despite passengers having to deal with overcrowding, delays, cancellations, strikes and among the highest ticket prices in Europe.

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It got worse yesterday as fare increases averaging out at 2.3% were introduced.

A Daily Mirror investigation, probing for the first time the true cost of rail privatisation, has found that tens of millions of pounds are spent on fatcat wages.

We scrutinised the accounts of 10 private firms involved in running train services and found they made £407million in profits last year alone.

Instead of being ploughed back into the network, improving services and cutting rail fares, much of this cash was paid out in dividends to wealthy owners.

The Mirror is calling for the rail industry to be re-nationalised.

£1,300,000: Stagecoach chief exec Martin Griffiths received this last year. The firm has made £659million profit over 10 years

Mick Cash, general secretary of rail union the RMT, said: "More than two decades of rail privatisation has turned Britain's vital transport services into nothing more than a money-making racket while passengers are left to rot in hell on rammed, expensive and unreliable trains.

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"The case for kicking these spivs off the tracks and bringing Britain's railways back into public ownership is overwhelming."

£10,000,000: National Express deputy chairman Jorge Cosmen and his Spanish family bagged this sum in dividends last year

Passengers are also backing the calls for change and lashed out at fare rises.

Leeds student Holly Carvath Stubley, 19, said: "You don't get a great service and most of the time you don't get a seat – and it is really overpriced. The railways should be nationalised. It would improve the service and make it more accountable."

Credits: PA£1,787,000: David Martin, Arriva's ex-chief exec, walked away after getting this much in 2015... and he got £1.6million in 2014 (Photo: PA)

Vincenzo Maggio, 40, from Cambridge, said: "Things are going backwards."

To add insult to injury, many routes are run by nationalised rail industries from other countries, including Germany's Deutsche Bahn.

Go-Ahead chief executive David Brown rec­­eived £3.4million in the past two years; and National Express boss Dean Finch got £3.3million in 2015.

FirstGroup plc chief executive Tim O'Toole has received £7million over the past five years, while Arriva boss David Martin got £1.8million in 2015 before he stood down in late 2015.

Credits: LNP£7,000,000: Tim O'Toole, chief executive of First Group plc, has been handed this massive sum over the past five years (Photo: LNP)

Passengers' cash also ends up lining the pockets of the owners of the operating companies. These include Stagecoach's biggest shareholders, co-founders Sir Brian Souter and his sister Ann Gloag. Their 26% stake earned £17million in dividends this year.

As chief executive, Sir Brian got £8.4million from 2010 to 2013. Virgin trains' UK parent company Virgin UK Holdings, ultimately owned by Sir Richard Branson, paid out a £479million dividend last summer.

Credits: PA

£479million: The huge dividend handed out by Sir Richard Branson's Virgin UK Holdings (Photo: PA)

Our probe also looked at Keolis, Abellio, Serco Group, and MTR Corporation.

The Rail Delivery Group, which rep­­­­­resents operators, claimed that profits are lower than those found by the Mirror – averaging at 3%.

It insists 97p of every £1 in fares goes into "running and improving the railway" yet failed to mention fatcat pay or the millions spent by operating firms on bidding to run new franchises. The Rail Delivery Group said: "Since 1997, when rail franchising was introduced, the railway's finances have transformed.

"In the late 1990s it cost taxpayers £2billion a year just to keep the trains running but following huge passenger growth rail companies now pay money back to the Exchequer.

£3,300,000: Dean Finch, chief executive of National Express, can certainly afford to smile after raking in this colossal amount in 2015

"This means billions more to spend on improving services."

Virgin Trains said since taking over the West Coast franchise nearly 20 years ago, it has transformed a business "dependent on significant government subsidies" into one that "regularly pays more than £100million a year to the Government".

£1,300,000: What David Brown, chief executive of Go-Ahead Group received in 2016, a year after scooping even more – £2.1million

Merseyrail, run by Serco and Abellio, said any "excess" profits are shared with local transport body Merseytravel.

Go Ahead said: "In the past year our rail division generated £222.4million for the Government and we paid £24.8million in corporation tax."

Credits: PA£17,000,000: Fellow Stagecoach founder Ann Gloag, who owns 26% of the company with Souter, shared £17million in dividends this year (Photo: PA)


£17,000,000: Stagecoach founder Sir Brian Souter also got £8.4m as chief executive at the firm between 2010 and 2013

Stagecoach Group said its rail companies contributed around £1billion in franchise payments to the Government last year "more than 10 times the level of profits". It added bosses' pay matches their "significant responsibility for running dozens of companies around the world".

10 scenic train trips in Europe
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10 scenic train trips in Europe

The line between Glasgow and Mallaig is one of Britain’s most eye-catching train journeys. During the course of the 164-mile route, the “Road to the Isles” hugs the banks of Loch Lomond on departure from Glasgow, before making its way past castles, mountains (including Ben Nevis) and waterfalls en route to Scotland’s west coast. Then, just as you approach the journey’s end, the track crosses the spectacular Glenfinnan Viaduct, made famous by the Harry Potter movies.

There’s no disputing the Cote d’Azur is one of Europe’s loveliest coastlines, with golden beaches and bright blue waters stretching for more than 100km. Skirt the shoreline from Fréjus in France to Ventimiglia in Italy and you can give this sandy playground a closer inspection, because there are ample opportunities to stop and soak up the atmosphere if you catch one of the daily regional TER trains, which call at Cannes, Antibes, Nice, Eze and other stops along the way.

Keep your eyes on the skies on the daily InterCity from Venice to Munich, which weaves through the mighty Alps on the Austrian-Italian border. Following one of Europe’s great trade routes, the train calls at some of Italy’s finest Renaissance towns, before continuing to Innsbruck via the Brenner Alpine pass. The section between Verona, Bolzano and Fortezza is particularly striking as the train traces the river Isarco north in the shadow of the Dolomites, briefly crossing into Austria before arriving into Munich in time for dinner.

The narrow-gauge railway from Nice to Digne les Bains, in the Alpes-de-Haute-Provence region, is a relative unknown in the world of scenic trains. A 90-mile journey taking around three hours, it crosses rivers and passes through enchanting communities such as St Andre les Alpes and Entreveux. This is a private railway, so it often remains undiscovered unless you’re on a tour. However, it’s open for exploration by independent travellers, too, departing Nice CFP station four times per day. 

A train trip doesn’t need to be long to be beautiful. The stretch from Messina to Catania in Sicily takes just 90 minutes, but the views of the coast and Ionian Sea are something to remember. If you’re travelling overnight from Rome, you’ll wake at daybreak to find the train being loaded onto a ferry. And from the moment you’re on Sicilian shores until your arrival in Catania you’re spoiled for choice – look east to see the rocky Mediterranean coastline and bobbing fishing boats, and west for none other than the peak of Mount Etna, Europe's tallest active volcano.

The joy of train travel is the transition from one place to another, watching the landscape unfold before you as you cross borders by rail. Starting out in Zurich’s cosmopolitan centre, this train quickly ascends into the Swiss Alps, passing green lakes, quaint villages, and snowy peaks. Just a few hours later you’ll descend into Italy, to the shores of Lake Como, catching a glimpse of the cupola of the cathedral and the lakeside villas bounded by Cypress trees. The Zurich to Como route is done on an everyday InterCity train, with no panoramic windows or fancy title to its name, yet it’s still a stunner of a trip. 

The Golden Pass refers to the stretch of railway from Montreux to Lucerne in the Swiss Alps. Though feasible in a day, the route isn’t one to conquer in such a short time, and should be savoured. With countless opportunities to get off and explore, it’s easy to build your own itinerary on Switzerland’s famous scenic railways. The region is home to a host of scenic services, including glass-topped panoramic trains and funicular railways, so it’s little wonder that the Oberland attracts such wide praise from train travellers. Between Lucerne and Interlaken the landscape is exceptionally beautiful, passing the emerald-green waters of Lake Lungern and lakeside hamlets at the Brunig Pass.  

Travelling at around 20mph, this scenic train is the epitome of slow travel. But although the Bernina “Express” hardly deserves its title, as it winds through the southern Alps, over bridges, gorges and precarious mountain passes, you wouldn’t want it to go any faster. Crossing some 200 bridges and passing through mountains via 55 tunnels, this is a feat of engineering so impressive that it has earned Unesco World Heritage status. The panoramic train has been designed to offer a ringside seat and as the rails mount the Albula pass to St Moritz, you won’t be disappointed by the views. 

Fjords, glaciers and snow-capped peaks provide the spectacle on the Bergen Line, one of Scandinavia’s most impressive train journeys. Travelling from Oslo to Bergen in around seven hours, the trip’s highlights include Europe’s largest mountain plateau, Hardangervidda. But it’s not just the views that impress; the railway itself is extraordinary. More than 15,000 men laid this track into the peaks and dug 182 tunnels out of mountain rock, by hand. Construction started in 1875 – and took 34 years to complete. 
An unexpected beauty in Spain, the train between Madrid and Oviedo offers a glimpse of classic Spanish countryside on its way from the capital to the north coast. And as the train approaches the Asturias region, and its principal city Oviedo, it climbs into the clouds, passing through the Picos de Europa mountains. Upon arrival in Oviedo, the train remains the best way to continue your explorations of the area: take a Feve narrow-gauge railway to Galicia and the Basque Country.

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