East Coast nationalisation 'could cost £50m'
Thu 03 Dec 2009
Renationalising the East Coast Main Line could cost the state at least £50 million, the government has confirmed.
National Express transferred control of the rail franchise to the government last month as it had been running at a loss since it acquired the operating contract.
Transport secretary Lord Adonis has now revealed that renationalising the line, which runs between London and Edinburgh, has left a significant shortfall in the public purse.
Speaking to the Transport Select Committee, he estimated that the overall cost to the taxpayer could be in excess of £50 million.
Lord Adonis insisted that the best way to create value for money for taxpayers and rail users is to have a competitive regime among private companies.
However, he warned that companies could soon be made to pay considerable and immediate financial penalties if they default on their contracts.
The government has already confirmed that it will invest in £12 million worth of improvements for stations along the East Coast Main Line, including Newcastle, York and Peterborough.
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