End the myths about rolling stock firms
KARL WEST’s article recycled several myths about the rail industry’s rolling stock leasing companies (“Gravy train still runs for rolling stock’s fat controllers”, May 20).
The rolling stock companies (roscos) such as Porterbrook have in fact played a leading role in the transformation of Britain’s train fleet over the past 15 years, financing thousands of vehicles for the benefit of passengers at a cost of several billion pounds without the need for additional public borrowing.
Our work has been subject to close scrutiny, especially by the Competition Commission, which did not accept allegations of overcharging. It put forward sensible changes to the transparency of rosco operations with which Porterbrook fully complies, and we are currently working with the Association of Train Operating Companies to become even more open than the commission required.
The three roscos vigorously compete with one another, lowering rail industry costs, but the rolling stock market is not our exclusive preserve. We have faced competition from new entrants, while some new trains are being procured directly by the government under a non-rosco model.
We are not opaque, as your article suggested. Porterbrook Rail Finance is wholly resident in the UK for tax purposes and is monitored by HM Revenue & Customs’ Large Business Service. We are registered in Jersey because this lowers our cost of capital, ultimately reducing costs to farepayers and taxpayers. Our company’s accounts are available from Companies House or the Jersey registry, and there is a link on our website to the Irish Stock Exchange where full financial information is freely available.
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Porterbrook’s ownership is shared between a number of infrastructure investors of the kind that the British government is keen to bring into other areas of national infrastructure, such as power stations, wind farms, high speed railways, roads or broadband. The roscos provide a model for generating long term economic growth that is worthy of proper study.
However, our business continues to be the provision of substantial new financing for rolling stock as well as engineering and asset management support for the fleets to maximise the benefits to operators and passengers. We continue to wish to invest both in new trains to serve a growing market and in the long-awaited modernisation of many existing trains.
Paul Francis, managing director, Porterbrook Leasing Company, Derby
Say goodbye to yesterday’s men
YOU gave space to Sir Roger Carr, president of the CBI, to present his views on the economy (“In going for growth, we really are all in this together”, May 20). In my opinion Sir Roger Carr is yesterday’s man, despite his position. Similarly, his friend Sir Nigel Rudd.
Sir Nigel and Sir Roger built the Williams conglomerate by buying companies cheaply but could not keep hold of the company, let alone expand it. When the going became tough, they demerged Williams to form Chubb and Kidde to “create shareholder value”, each holding the post of chairman at one of the separate companies.
As they could not create shareholder value, they were removed — sorry, they retired or stepped down. Both the companies were sold to the Americans.
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Sir Nigel sold Boots the chemist to a foreign company. He became chairman of Invensys, which now has foreigners hovering to buy the business cheaply as there has been a profit warning. Sir Roger muddled with the troubled pubs group Mitchells & Butlers and is toying with Centrica [where he is now chairman]. His last notable act was to sell Cadbury to the Americans. He received his knighthood soon after.
Both of them are serial chairmen. They have not helped British industry and yet they are regarded as the best people to run it and to provide advice for the government.
It is time that these yesterday’s men are recognised as such and to ensure that British industries are not sold to foreigners. If the foreigners can run our companies and make a profit, why can’t these men?
Sunil Kumar Pal, London NW8
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