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BR warns of 'zero profits' from freight

Christian Wolmar
Wednesday 03 November 1993 00:02 GMT
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BRITISH RAIL'S main freight company will see its pounds 100m profit drop to zero over the next three years largely due to the loss of coal income, according to an internal memorandum leaked to Hugh Bayley, the Labour MP for York, writes Christian Wolmar.

Trainload Freight made pounds 103m last year but the memo, by the corporate planning manager, Graham Smith, suggests that this will drop to pounds 46m this year and to pounds 4m in 1995-96 because while income is expected to fall, few savings can be made as most costs are fixed.

The figures are a blow to the Government's privatisation plans. The BR chief executive, John Welsby, last month met Roger Freeman, the Public Transport Minister, to discuss plans to split the company into three. In a leaked outline of the meeting Mr Welsby said rail freight will be lost to road: 'We are playing a zero sum game with a totally inelastic market.'

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