Noble Lord cuts off nose to spite face?

Telegrammed by Ithuriel
According to Lord Adonis:

In determining the future of the C2C and NXEA franchises, my overriding concern has been to minimise disruption to passengers and staff, and cost to the taxpayer, while ensuring that train companies stand by their commitments. I judge these objectives are best served by:

• Terminating NXEA’s franchise in 2011, causing them to forego three years of profit; and

• Beginning the refranchising process immediately so that a new operator is in place in early 2011.

Since NXEA is receiving revenue support under cap and collar, which for 2008-09 was double this year's subsidy, future profitability is, at best, unclear.

Subsidy rises dramatically to £23 million in 2010-11 and £41 million in 2011-12 but this is because NXEA is managing the acquisition of 30 new four car Electrostars and the transfer of 17 Class 321s to increase capacity. The extra subsidy is to pay for extra lease rentals, depot upgrades and other associated infrastructure work.

According to the Lib Dems NXEA is a 'lame duck franchise' and should be terminated immediately.

That would do wonders for the team procuring £155 million of new trains.

On the other hand, the Old Leftie has cleared the decks for the NatEx rights issue.

Eye remains to be convinced that this is either a good thing for the squashed NXEA commuter or the tax payer.