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Passengers angry at banks' stranglehold.

Byline: By Daniel Thomson

Train passengers hit out last night after being told they are helping to bankroll a pounds 165m "monopoly" in which three banks control the country's rolling stock.

The Government has asked the Office of Rail Regulation to investigate the banks, which own and lease out most of the country's trains, including those on the East Coast Main Line, after allegations they have exploited their domination of the market.

The three main rolling-stock leasing companies ( owned by HSBC, Abbey and Royal Bank of Scotland ( charge train operators such as GNER more than pounds 1bn a year and are believed to make a combined profit of more than pounds 165m.

Last night, passenger groups and rail unions said the groups' stranglehold had train operators in an impossible position and was forcing fares to "ludicrous" highs. The Department for Transport said it was not satisfied the prices charged for rolling stock were fair and is understood to believe the banks could be overcharging by pounds 100m a year.

A DfT spokesman said: "It is the department's contention that there is a lack of effective competition and excessive leasing charges within this market. The ultimate cost is borne by the Government and fare payers."

Ian Walker, spokesman for rail campaign group Railfuture North-East, said: "There are only three major players in the market and they have train operators over a barrel. These companies own all the trains and it's passengers who foot the bill if rail operators have to increase fares. The only solution would be if train operators bought their own rolling stock, but it appears they do not have the funds to do so."

Independent rail watchdog Passenger Focus said it was concerned the high costs were passed to passengers in fare increases. Chairman Colin Foxall [correct] said: "Passengers deserve to know that they are getting good value for money out of the arrangements for leasing trains."

RMT union general secretary Bob Crow said: "The rolling-stock companies have been making a mint out of leasing public assets back to the public at exorbitant rates.

"The banks that own our trains have made hundreds of millions of pounds and helped push rail fares to ludicrous levels. An investigation into their profiteering is overdue and very welcome."

The ORR said the inquiry would take at least three months. The lease firms are Angel Trains, owned by RBS, Porterbrook, owned by Abbey, and HSBC Rail. They have invested pounds 4bn in 10 years.

Angel Trains managing director Haydn Abbott [correct]said: "We welcome this inquiry and the much-needed clarity it will give for our investment decisions going forward."
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Publication:The Journal (Newcastle, England)
Date:Jun 29, 2006
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