PRIVATISED rail profits have racked up 15 pence of every pound passengers paid on fares, transport union the RMT said yesterday on the day rail fares were raised by 2.6 per cent.
New research by the RMT reveals that the private train operating and rolling stock companies’ profits from last year stand to be equivalent to 15 pence of every pound passengers paid on fares during the same period.
RMT is demanding an end to this shameless profiteering to allow all revenue profit to be reinvested in improving the rail network for passengers and ensuring a fair deal for rail workers.
The union said: ‘Since March 2020, the private Train Operating Companies have been operating under Emergency Measures Agreements (EMAs) and Emergency Recovery Measures Agreements (ERMAs) through which the government takes on all revenue risk, and funds the cost base of the franchise, whilst paying the operators a “management fee” used to fund profits and dividends. Without this significant taxpayer support, the train companies would have become unviable.
‘Based on Department of Transport data, RMT estimates that passenger numbers, and hence revenue, since the beginning of the Covid pandemic in March 2020 averaged just 25 per cent of pre-Covid levels over the whole year.
‘Despite this, the management fees and profits received by private train operators stand to be higher than £140m, equivalent to around six per cent of all passenger fares collected last year.
‘Shockingly, this is three times higher than the proportion of passenger revenue paid out as profit by the train operators prior to the pandemic, which averaged two per cent.
‘The government has also continued to pay rolling stock lease costs under the ERMAs, enabling the private rolling stock companies (ROSCOs) to continue profiting – and they stand to make over £220m.
‘RMT estimates that the ROSCOs’ profits combined with the train operators’ fees stand to see a massive £370m in profit leakage to private rail companies last year, equivalent to around 15 per cent or 15p in every pound of all passenger revenue collected during the pandemic.’
RMT General Secretary Mick Cash said: ‘This pandemic profiteering is totally unacceptable and, rather than lining the pockets of big business, this money would be far better spent being reinvested in improving the rail network for passengers, and scrapping the pay freeze imposed on key worker rail staff.’
