UK News - Britain to nationalize busy rail line

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Britain to nationalize busy rail line

LONDON (UPI) -- British Transport Secretary Andrew Adonis said the government will nationalize the Edinburgh to London rail line, the country's busiest intercity route.

The government will take over the East Coast Main Line for "about a year," Adonis said, calling the move "highly regrettable."

"The government is not prepared to renegotiate rail franchises," he said. "I am simply not prepared to bailout companies that are unable to fulfill their commitments."

Talks with National Express to extend the franchise broke down last week, The Times of London reported Wednesday.

The company signed up for the franchise assuming revenue growth of 10 percent a year, but the recession has dropped revenue growth on the line that carries 17 million passengers a year to 1 percent in the past six months, The Times said.

The default has provoked a bitter exchange between the company and the Transportation Department.

Adonis said National Express Chief Executive Officer Richard Bowker was leaving due to financial problems at the company. But Chief Operating Officer Ray O'Toole denied the company was in default "on any of our commitments."

"There are no financial problems at group level and Richard Bowker has not left because of financial difficulties," O'Toole said.

Copyright 2009 by United Press International

This news arrived on: 07/01/2009

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