Deputy takes over as rail franchise head
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Your support makes all the difference.The Government yesterday ended its search for a new official to manage the privatisation of the rail network, following the decision of the exising director of passenger rail franchising, Roger Salmon, to quit his job two years earlier than planned.
The new head of the Office of Passenger Rail Franchising (Opraf) is John O'Brien, who currently acts as Mr Salmon's second in command. His appointment will last for three years and he takes over the job in the autumn.
Opraf plays a key role in the controversial rail sell-off, by deciding between rival bidders for each of the 25 passenger operating franchises. There had been speculation that Mr Salmon decided to leave his job early because of Government pressure to speed up the privatisation process.
So far nine passenger franchises have been sold off, with 16 still under British Rail. However, on Friday Opraf announced that Prism Rail, the publicity-shy bus group which this year gained a listing on the Alternative Investment Market, was the preferred bidder for two more franchises: South Wales and West, and Cardiff Railway.
Yesterday Prism said it would launch a rights issue to fund the purchase at 240p a share. The company declined to reveal how much money it intended to raise, though industry sources suggested this would be in the region of pounds 12m.
Prism Rail's shares soared by more than 13 per cent on the announcement, rising by 35p to close at 300p. It means the company has trippled in value since it raised pounds 8m in its float in May, with heavily oversubscribed shares priced at just 100p. The shares more than doubled in value on the first day's trading, netting more than pounds 1m for the chairman, Godfrey Burley.
The company came to public attention earlier this year when it won the franchise to run the London Tilbury and Southend Railway, after Opraf scrapped a management buyout amid allegations of ticketing irregularities. Opraf said Prism's bid to run the network was "significantly" cheaper in terms of state subsidy than British Rail's.
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