Transport operator pulls out: [3 All-round Metro Edition]
The Australian [Canberra, A.C.T] 17 Dec 2002: 5.
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Abstract
A LEADING operator of Victoria’s privatised transport system announced yesterday that it would be handing back to the state Government control of significant parts of the metropolitan train and tram network, along with the country passenger lines, two days before Christmas.
The rail and tram privatisation, initiated during the Kennett era, has been plagued by operational turmoil and massive financial losses.
Yesterday the British-based National Express issued a statement saying it would be withdrawing from all train and tram operations in Australia effective next Monday.
Full Text
Alison Crosweller
John Stapleton
A LEADING operator of Victoria’s privatised transport system announced yesterday that it would be handing back to the state Government control of significant parts of the metropolitan train and tram network, along with the country passenger lines, two days before Christmas.
It is believed the multinational National Express Group pulled out after the Bracks Government rejected demands for a more than $100 million bailout, thesecond such grant in less than 12 months.
National Express was the part-beneficiary of a $110 million government bailout of the three public transport operators earlier this year.
The rail and tram privatisation, initiated during the Kennett era, has been plagued by operational turmoil and massive financial losses.
Difficulties with the ticketing system meant operators were losing up to $50 million a year in fares.
The Labor Government has previously ruled out buying back Melbourne’s public transport network.
Yesterday the British-based National Express issued a statement saying it would be withdrawing from all train and tram operations in Australia effective next Monday.
Chief executive Phil White said the Victorian subsidiary had been in negotiation with the state Government for more than a year in an attempt to put their train and tram businesses on a firmer footing.
He said the company had become increasingly concerned at the future viability of the operations and they were not prepared to fund further losses. Thecompany had an operating loss of $6.4 million for the first half of this year, despite government assistance of $46.2 million.
The operations were forecast to incur significant losses through 2003 and beyond.
The one-off cost to National Express of writing down its investments in Australia is estimated to be $378 million.
Mr White said it was not in the best interests of the group or its shareholders to continue.