THE Government is to take back control of one of Britain’s busiest rail commuter networks after accusing Connex, the French company running the franchise, of financial incompetence.

The Strategic Rail Authority will run South Eastern for at least a year from December but says that the network will eventually be returned to a new private sector operator.

Richard Bowker, the chairman of the authority, made a blistering attack on Connex’s management of its finances. The company had received £58 million in extra subsidy in December to help it to continue to run services this year. But Connex had told the authority that it needed a further £150 million to £200 million for the next three years.

Mr Bowker said: “I’m not putting any more taxpayers’ money into a company in which we have lost total confidence.

“I was worried they did not understand enough themselves to be able to predict and manage the future with the kind of certainty and confidence which we had every right to expect.

“If they can’t get the basics right, what hope is there for the overall business management?” Mr Bowker said that the main problems related to Connex’s financial forecasting and budgeting. The company had failed to fulfil its pledge last December to improve its financial controls.

He said that he could not give any details of the alleged mismanagement because Connex had suggested that it might challenge his decision in the courts.

Mr Bowker made no complaint about the performance of the company’s 1,800 daily trains between London and Kent, Surrey and East Sussex. He said: “In terms of performance and commuter services, they are OK.”

The authority said that Connex had, in fact, performed better in terms of the punctuality of its trains than either of its two rival operators south of the Thames — South West Trains and South Central. Last month Connex ran 90 per cent of trains on time on its suburban network, its best performance for two years.

But the company had been plagued by delays in introducing new carriages that cost £1 billion and it had been fined repeatedly for packing passengers on to trains that were too short.

Olivier Brousse, the chief executive of Connex, said that he was shocked by the decision, which will see the company hand over control to the authority in December.

“While we acknowledge the SRA’s decision, we strongly disagree with the reasons behind it. We are considering all our options,” he said.

The decision raises doubts over whether Connex has a realistic chance of winning any further train contracts in Britain. With First Group, the company had been shortlisted for the new Trans-Pennine franchise, but it may have to withdraw altogether from Britain.

Connex, which runs trains in the United States, Germany and Australia, had been one of biggest players in the British rail industry after privatisation. But it was stripped of its South Central franchise two years ago after an outcry by passengers over its poor performance.

The authority’s new team taking over South Eastern includes Terry Worrall, the former boss of Thames Trains, which was strongly criticised for poor staff training after one of its drivers missed a red light and caused the Paddington train crash in 1999.

Mr Worrall first came to public attention in 1991 when he was British Rail’s operations director and gave the now-famous excuse that trains had been unable to cope with “the wrong type of snow”.

The authority said that it hoped to replace its interim company with a new private operator by the end of 2004. The private operator would combine Connex’s current routes with new domestic services using the high-speed Channel Tunnel Rail Link from 2007.

Passenger groups welcomed the decision to remove Connex but said that the company’s 120,000 commuters would be worried that there could be a “meltdown in performance”.

Anthony Smith, the national director of the Rail Passengers Council, said: “Connex passengers now need some certainty as to what they can expect from their rail services in the next 18 months. They don’t want to be left in limbo with nothing getting better.”

Richard Rosser, the general secretary of TSSA, which represents white-collar rail staff, said: “The Strategic Rail Authority should use this opportunity to take the franchise in-house.”

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