£58m to bail out crisis-hit Connex

TAXPAYERS are being forced to provide a £58m bail-out for Connex, Britain's biggest commuter company. Under a deal announced this afternoon, the controlling Strategic Rail Authority will provide the cash to 'prop up' the company and improve services, such as providing new trains.

Connex, which provides local and Kent coast services into Charing Cross, Cannon Street, Blackfriars and Victoria stations, will also have its franchise shortened by five years.

The French-owned company has carried out a series of cash-cutting measures - down to telling staff not to use drinking fountains at its headquarters in the Blackfriars Road. Managing director Olivier Brousse warned staff in a memo that costs must be cut if the company was to survive.

A Connex spokeswoman declined to say if the company had approached the SRA for cash. She said: 'This is not about money. We are putting £11m towards the deal. We are getting £58m from the SRA under an agreement that we can continue to improve our franchise.'

The Connex franchise will stop in 2006 compared with the original timetable of 2011. In 2007, a much larger new franchise will be offered including Connex routes and domestic commuter services using the new high speed Channel Tunnel line from Kent coast. Connex said it would 'definitely' be bidding for the new franchise.

The SRA said today's deal was to provide 'stability' on commuter routes next year. However, it will increase speculation over Connex's financial stability. The company has ordered new trains worth hundreds of millions of pounds but these have proved problematic and have not yet come into service.

The company, heavily criticised by passengers for poor service, admitted it will not be able to run the trains at full speed because there is not enough power in the tracks.

Connex has been so short of stock that it has even borrowed carriages from a railway museum.

A report by the SRA to be published tomorrow is expected to highlight Connex's poor performance. Last December it was revealed that during the previous year the company was fined more than £10m, mainly for late-running trains.

The fine also included a £1m penalty for running trains with not enough carriages - a chronic cause of overcrowding.