Department of Transport

Mawhinney welcomes sale of major rail businesses
_______________________________________________________________

date 5 June 1995
source Department of Transport
type Press release

note 170

Dr Brian Mawhinney, the Secretary of State for Transport, today
welcomed the first of the sales of British Rail's six maintenance
depots which between them overhaul 13,500 of BR's fleet of
locomotives and carriages.

More than 70 organisations expressed interest in the businesses -
attracting competitive bids from key engineering companies, train
builders and management buyout teams. All six depots are being sold
as going concerns.

Between them the businesses employ 3,400 people and had a turnover of
around #180 million in financial year 1994/95.

BR today sold to ABB Customer Support Ltd, a subsidiary of ABB, the
depots at Chart Leacon (Ashford, Kent), Ilford and Doncaster.

BR hopes to complete this week sales to:

Railcare Ltd, a joint venture of Babcock International Group plc and
Siemens plc, who intend to buy depots at Wolverton (Milton Keynes)
and Springburn (Glasgow);

Wessex Traincare Ltd, a management buyout team who intend to buy the
Eastleigh (Hants) depot.

Welcoming the sale, Dr Mawhinney said:

"This is a major step forward for rail privatisation. It
is a clear demonstration of the private sector's interest in the
process and its commitment to the long term future of the railway
industry.

"It is good news for the industry and for passengers. I
believe that this will result in substantial competition for the
maintenance of the rail fleet with companies striving to secure
business on quality and price.

"For workers in the industry it should forge new links
and partnerships with the broader engineering industry.

"I hope that placing these businesses in the private
sector will bring new efficiencies and new partnerships in the
industry.

"Operating in the public sector held back the maintenance
industry. They were not allowed access to private capital, could not
diversify or compete for business with the private sector.

"I trust that all that will now change and bring with it
new and broader opportunities for the staff."

John Welsby, Chairman of the British Railways Board, said:

"These sales encourage a healthy and competitive
structure for the train maintenance industry linking the skills of
the workforce and the opportunities offered by the private sector. I
am delighted that the buyers include both highly experienced railway
engineering companies and a Management and Employee buyout team.
That is a highly encouraging pointer for future sales under the
privatisation programme."

Dr Mawhinney put today's announcement into the broader context
of rail privatisation:

"This is a major sale under the Railways Act 1993.
Invitations to tender have been issued for the first three passenger
train operating companies and we are on target for the first
franchises to be awarded by the end of the year. I hope that BR will
have completed shortly the sale of six of the seven BRIS design
offices and the Occupational Health Unit.

"A number of engineering and manufacturing parts of BR are expected
to be sold over the summer and the Rolling Stock Companies, British
Rail Telecommunications, the track renewal units and the
infrastructure maintenance units should all be in private sector
ownership by the end of the year."

Note to Editors

1. The six depots, formerly known as British Rail Maintenance
Limited (BRML) or as Level 5 depots, are at Eastleigh (Hampshire),
Chart Leacon (Ashford, Kent), Ilford (Essex), Wolverton (Milton
Keynes, Buckinghamshire), Doncaster (South Yorkshire) and Springburn
(Glasgow). They service the fleet of rolling stock used by the
passenger and freight railway businesses. The depots are engaged in
heavy maintenance and repair of traction and rolling stock, and
related components and parts. They are capable of handling virtually
any type of dismantling, maintenance, modification or damage repair.

2. Their main customers will be the three Rolling Stock Leasing
Companies (ROSCOs), who own the majority of BR's passenger fleet. It
is intended that the ROSCOs will be sold by the end of this year.

3. The BRML depots also provide maintenance services for various
other BR businesses, including the freight companies.

# = pounds sterling

Railhub Archive ::: 1995-06-05 DoT-001