East Coast rail route on track as it hits profit

The company tasked with running a key Scotland to London rail route on behalf of the government yesterday reported a profit and 3 per cent boost in passenger numbers in its first year of state ownership.

Directly Operated Railways (DOR), which runs the East Coast main line for the Department for Transport (DfT), said its turnaround of the business was under way, but warned it was still fixing problems it inherited.

DOR, which was handed back to the DfT by previous franchise owner National Express, said that staff morale was low, investment had ceased and key engineering skills had been "allowed to evaporate" when it took the business on in November last year.

The operator, which aims to hand the company back to private ownership by the end of 2012, posted a net profit of 1.2 million in the nine months to 31 March, on turnover of 233.8m.

The line runs from King's Cross to destinations including York, Newcastle, Edinburgh and Inverness. It had the poorest punctuality record across the sector during September, according to Network Rail, but this was largely due to factors outside its control, such as cable theft.

Elaine Holt, chairman and chief executive of DOR, said it was not until the business was transferred that the company realised the "full extent of the challenge". She said: "It quickly became apparent that a complete business turnaround would be necessary."

DOR said it had implemented and planned initiatives including new first class space, lower cost advance tickets and cleaner toilets.

The exit of National Express represented the second franchise termination on the line following the early ending of GNER's stewardship in 2007, which also followed financial problems.

National Express had been contracted to run East Coast until 2015, but was burdened with 1.4 billion in premiums over the life of the franchise.