One owner for bulk rail freight
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by Karen Miles • Britain's bulk rail freight business looks set to receive a massive management shake-up following a decision to sell all three companies as a single entity to a US rail operator.
With the nomination of Wisconsin Central and Onmitrax as preferred bidders for the combined business of Transrail, Loadhaul and Mainline, British Rail has ruled out separate bids from its own three management buyout teams.
Both Wisconsin and its smaller US rival Omnitrax, have been asked to submit new bids for the combined £575m-turnover businesses and a unified bulk railfreight company could be in the private sector within two months.
The move has been welcorned by rail freight users who believe that the win ner—widely expected to be Wisconsin—will improve service levels and reverse the long-term decline of rail freight compared to road transport.
The winner will take on a business which makes an operating profit of £73m and carries 90 million tonnes of full-trainload traffic nationally—equivalent to four million lorry loads. The main cargoes are coal, metals, petrol, aggregates and chemicals.
However, if the Government rubber-stamps BR's final choice of a single owner for all three companies its plans could run into trouble. The rail regulator has already said that if that happens he wants "additional regulatory safeguards" so that the deal yields "the appropriate benefits or protection for users."