Arriva Cross Country train, Newcastle. Photo Workers.
Many British rail and bus companies have ended up being owned by overseas state transport enterprises. Now one of the largest has been sold to a private equity company. That’s not good news, according to one of the rail unions.
US private equity firm, I Squared Capital, has bought bus and rail operator Arriva in a deal worth about $1.69 billion, including debts.
I Squared, whose headquarters are in Miami, already owns the UK power generating company Conrad Energy, trailer leasing company TIP, and energy solutions group Aggreko. Worldwide, it has over £37 billion assets under its management.
Arriva currently employs over 34,000 people, including over 18,800 workers in Britain. It operates bus and rail services across ten European countries, including Britain. It transports 1.5 billion bus and rail passengers a year.
Arriva is one of the largest train operators, running the London Overground rail network, and the Chiltern, Grand Central and CrossCountry franchises. It also runs 4,700 buses, including the largest fleet of London’s double-decker red buses.
It is a profitable operation. Since 2010 Arriva has paid out a total of £340 million in dividends from its British rail operations: £103 million from CrossCountry, £32 million at London Overground, £26 million at Grand Central and £179 million from its former franchise Arriva Trains Wales. Last year alone, Arriva received dividends of £9.5 million from London Overground, and its top director got over £1 million.
The Rail, Maritime and Transport union reacted angrily, pointing out that I Squared is registered in the Cayman Islands tax haven. General secretary Mick Lynch said, “This sale of Arriva by German state railway to a tax haven-registered company underscores what a perverse and corrupt system rail privatisation is in this country.”
• A longer version of this article is on the web at www.cpbml.org.uk