Re: M>Tram to be handed back to the government
malrowe <[email protected]>
Monday, December 16, 2002 12:34 PM
Here is the National Express press release posted on their UK
website:
=====
Withdrawal from train and tram operations in Australia
As reported in the interim results announcement in September, our
Australian subsidiaries have been in extensive negotiations over the
past year with the Government of the State of Victoria
("Government") regarding the future of our train and tram operations
there.
As negotiations have continued, we have become increasingly
concerned at the future viability of our tram and train operations
as the financial terms of the revised agreements under discussion
have become more stringent, particularly against the background of a
declining subsidy profile. Both parties acknowledged that the
process was taking longer than they had originally anticipated and
the Victorian election, called early in November, further delayed
the process.
After a year of negotiation, we have concluded that we are not
prepared to fund losses on these operations as we are unable,
despite significant efforts by the Victorian Government and
ourselves, to reach a revised financial arrangement with the
Government without incurring an unacceptable level of operational
and financial risk from next year onwards.
In view of this we have given notice today to the Victorian
Government that we will stop providing funds to enable the train and
tram subsidiaries to meet their liabilities as and when they fall
due with effect from 23 December 2002.
We are currently in discussions with the Government with a view to
providing an orderly handover of these operations in order to keep
disruption to a minimum.
The one-off cost to the Group of writing down our investments in
Australia is estimated to be £135 million, including a potential £48
million cash payment to indemnify the providers of the performance
bonds for these operations and approximately £87 million as a non-
cash asset writedown which will be taken as a charge in the Group's
accounts for the current year. Turnover for the train and tram
operations in the year to 31 December 2001 totalled £153 million
with operating profit of £9.4 million. Turnover in the first half of
this year totalled £84.9 million with an operating loss of £2.3
million after an interim payment of £16.5 million provided by the
Government during the first half. These operations are projected to
incur significant losses in 2003 and beyond.
Our bus operations in Melbourne, Brisbane, Sydney and Perth are
unaffected by this decision.
Commenting on today's announcement Phil White, Chief Executive,
said:
"Although UK rail remains challenging, progress within our UK and
North American operations continues to be good. We are, however,
very disappointed at having to make today's announcement relating to
our Australian train and tram franchises.
Our Australian subsidiaries have been in negotiation with the
Victorian Government for more than a year in an attempt to put our
train and tram businesses on a firmer financial footing. As
previously acknowledged by Government, considerable hard work and
effort have been employed on all sides. Despite our best endeavours,
our team has been unable to conclude revised terms which are
acceptable to both the Government and ourselves and, therefore, we
have decided that it is in the best interests of the Group and our
shareholders to withdraw from the Victorian rail market. Whilst we
have given the Government notice that we are to end funding, we are
committed to an orderly handover of our train and tram operations,
working alongside the Government, and will endeavour to ensure
minimal disruption for both passengers and employees."
- E ND S -
=====
Mal Rowe ... wondering if he will have a means of travel to work
tomorrrow!!
Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/
website:
=====
Withdrawal from train and tram operations in Australia
As reported in the interim results announcement in September, our
Australian subsidiaries have been in extensive negotiations over the
past year with the Government of the State of Victoria
("Government") regarding the future of our train and tram operations
there.
As negotiations have continued, we have become increasingly
concerned at the future viability of our tram and train operations
as the financial terms of the revised agreements under discussion
have become more stringent, particularly against the background of a
declining subsidy profile. Both parties acknowledged that the
process was taking longer than they had originally anticipated and
the Victorian election, called early in November, further delayed
the process.
After a year of negotiation, we have concluded that we are not
prepared to fund losses on these operations as we are unable,
despite significant efforts by the Victorian Government and
ourselves, to reach a revised financial arrangement with the
Government without incurring an unacceptable level of operational
and financial risk from next year onwards.
In view of this we have given notice today to the Victorian
Government that we will stop providing funds to enable the train and
tram subsidiaries to meet their liabilities as and when they fall
due with effect from 23 December 2002.
We are currently in discussions with the Government with a view to
providing an orderly handover of these operations in order to keep
disruption to a minimum.
The one-off cost to the Group of writing down our investments in
Australia is estimated to be £135 million, including a potential £48
million cash payment to indemnify the providers of the performance
bonds for these operations and approximately £87 million as a non-
cash asset writedown which will be taken as a charge in the Group's
accounts for the current year. Turnover for the train and tram
operations in the year to 31 December 2001 totalled £153 million
with operating profit of £9.4 million. Turnover in the first half of
this year totalled £84.9 million with an operating loss of £2.3
million after an interim payment of £16.5 million provided by the
Government during the first half. These operations are projected to
incur significant losses in 2003 and beyond.
Our bus operations in Melbourne, Brisbane, Sydney and Perth are
unaffected by this decision.
Commenting on today's announcement Phil White, Chief Executive,
said:
"Although UK rail remains challenging, progress within our UK and
North American operations continues to be good. We are, however,
very disappointed at having to make today's announcement relating to
our Australian train and tram franchises.
Our Australian subsidiaries have been in negotiation with the
Victorian Government for more than a year in an attempt to put our
train and tram businesses on a firmer financial footing. As
previously acknowledged by Government, considerable hard work and
effort have been employed on all sides. Despite our best endeavours,
our team has been unable to conclude revised terms which are
acceptable to both the Government and ourselves and, therefore, we
have decided that it is in the best interests of the Group and our
shareholders to withdraw from the Victorian rail market. Whilst we
have given the Government notice that we are to end funding, we are
committed to an orderly handover of our train and tram operations,
working alongside the Government, and will endeavour to ensure
minimal disruption for both passengers and employees."
- E ND S -
=====
Mal Rowe ... wondering if he will have a means of travel to work
tomorrrow!!
Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/