Red Star slams its own report
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• Red Star has attacked its own internal audit which claims that it needs to overhaul its road delivery operation.
The report is highly critical of several contracts awarded to Coventry-based Roadexpress, alleging that the firm has been given preferable terms and conditions over other operators. Roadexpress declines to comment on this.
The British Rail subsidiary believes that it is "getting value for money" from Roadexpress. But the audit report says the various Roadexpress contracts have lost Red Star at least £1.6m over the 12 months to March this year.
Red Star says it is too early to say exactly what action it will be taking in response to the report, but the company accepts that it may have to make "one or two changes".
BR directors helped set up six-year-old Roadexpress, which handles about 60% of Red Star's road deliveries. But it stresses that none of its directors have a financial share in the firm, which operates more than 100 vehicles on .R.7.5m worth of Red Star contracts.
The report also criticised British Rail for allowing Roadexpress three years' notice of contract termination, compared with three months for other subcontractors.