TRANSPORT minister Humza Yousaf is to unveil the biggest shake-up to Scottish rail in decades.

Campaigners believe the planned reforms will lead to nationalisation of the troubled ScotRail service.

Public bodies such as Calmac Ferries, the Transport for Edinburgh group, which includes Lothian Buses, and Strathclyde Partnership for Transport, which runs the Glasgow subway system, are all in the running to take over the train franchise.

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Yousaf is preparing a public sector bid to take over Scotland’s railways, when the contract held by Dutch firm Abellio ends.

Last night, rail unions hailed the plan as "a form of nationalisation" and said it was "breaking with decades of privatisation dogma".

Among the Scottish government's other options is the creation of a government-owned company or a public-private sector partnership to take over the ScotRail franchise.

Yousaf will rule on which plan he will sign off after MSPs come back to parliament following the summer recess.

The shift came after Yousaf was forced to apologise to passengers following widespread disruption on ScotRail services last winter. The company was also fined £483,000 for failing to meet required standards for trains and stations.

Yousaf's officials will look at which of the five public sector options would best deal with issues such as service delivery, finance, staffing and industrial relations.

Ministers have faced calls to strip Abellio of the ScotRail franchise it took over in 2015 in a 10-year deal worth up to £6bn but with the option to cancel it at the halfway point.

Last night, Yousaf insisted the SNP was delivering on its 2016 manifesto pledge to ensure a public sector bidder is in place when Abellio's ScotRail contract expires in 2025.

Speaking exclusively to the Sunday Herald, Yousaf said: "We have narrowed down the possible vehicles that could potentially take forward a public sector bid.

"Transport Scotland are now working on gathering further evidence and I will narrow down the options further once that exercise is complete.

"The Scottish Government is committed to creating a level playing field for rail franchising in the future."

A favoured option is likely to be CalMac Ferries, which describes itself as a “wholly-owned subsidiary of David MacBrayne Ltd, which is wholly owned by Scottish Ministers”.

However, a publicly owned company could be created to help oversee the service alongside Calmac, which has experience of ferry ticketing and delivering transport services.

SNP MP Chris Stephens welcomed what he said was a "radical and bold programme" for ending rail privatisation.

He said: "Public ownership of public services will always be more efficient and leads to better delivery of services."

Putting together any bid is likely to cost between £3 million and £5 million, and would pit public sector bodies against firms such as Abellio for the contract.

Yousaf has repeatedly claimed Holyrood does not have the power to fully renationalise rail and that the service has to go out to bidders for tender.

However, rail unions said Yousaf's announcement, made at private talks with them at Holyrood, was a major step towards nationalisation.

The transport union TSSA's national political officer Sam Tarry said: "The public argument for stopping foreign companies owned by the governments of other countries has clearly been accepted by the Scottish Government.

"They have recognised that the sole beneficiaries of ScotRail and any profits it makes should be the Scottish people.

"Now there is the exciting prospect of a breaking with decades of privatisation dogma - and instead looking at modern publicly owned and operated ways of running Scotland's railways.

"We are looking forward to working with the Scottish Government every step of the way; this has the potential to be a beacon of progressive alternatives to the rest of Britain - a railway for the many not the few."

Kevin Lindsay, Scottish secretary of train drivers' union ASLEF, also welcomed the shake-up, but called for full nationalisation of ScotRail.

Lindsay said: "If [one of the public bodies] won the bid it would mean a form of nationalisation. There are a lot of pitfalls with this system, but it's a step in the right direction. Our view is that we should look at a way of taking the railways back into full public ownership."

Mick Hogg, Scottish organiser of the transport union RMT, said that Yousaf's plan would be a "stepping stone" for full nationalisation of rail.

He said: "We want to see the renationalisation of the railways. We have a strong sense that Humza Yousaf is speaking our language and is ticking the right boxes. This Scottish model could be a stepping stone for the railways being taken back into public ownership."

Labour MSP Neil Findlay, echoing the comments, said: "I welcome these talks as a move in the right direction however I don't want the public sector or a public-private partnership just to be able to bid for the franchise I want the railways renationalised so they are owned by the public and run in our interest and not in the interest of shareholders."

However, an Abellio spokesman insisted rail services were improving in Scotland. A company spokesman said: "Performance on Scotland’s railway continues to improve. Latest performance figures show that 92 per cent of services ran on time in the four weeks up to 24 June 2017.

"This compares to 90 per cent for the same period last year – an increase of two percentage points in just twelve months. As we have indicated previously we have no problem competing with a public sector bid should that be what the Scottish Government decides to do.”