THERE may have been much hoo-ha in the press in recent days about the fact that already-extortionate rail fares are going to rise 6% in England and Wales and 4% in Scotland, but the markets had little to say about it.
Shares in Stagecoach, owner of the South Western and East Midlands franchises, bumped up 10p to almost £3 last week. FirstGroup shed a few pence when investors saw the terms of its West Coast Main Line franchise win, but for that reason only. No-one is pricing in changes to the planned increases, despite the rising political heat. In these times of economic hardship, rail bosses are in danger of becoming as unpopular as bankers.
The Scottish Government PR machine seemed to have spotted what the markets had not, judging by the story in Friday's Herald about the SNP battling the Coalition to win more powers over rail. We were told the Scottish Government is seeking to win powers to do things such as reversing the Major-era separation of trains and track, which sounds intriguing even if the timing of the news was probably not coincidental.
With the First ScotRail franchise due for renewal shortly, ahead of the current contract running out in 2014, the onus will certainly be on the Nats to make amends for the shoddy way in which they awarded First an extension to the current contract during their first term. Transport Scotland is due to publish its Rail 2014 consultation and some MSPs are muttering about not-for-profit Scottish rail services. The markets would do well to keep an eye on what is happening north of the Border, too.
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