First Group to sell GBRf?

A report in the UK’s Financial Times suggests that French state-owned rail firm SNCF, Eurotunnel and the UK’s second largest rail freight firm, Freightliner, have all emerged as potential buyers.

A spokesman for First Group, which also operates passenger rail and bus services, declined to comment, saying it did not respond to press speculation.

A Eurotunnel spokesman also refused to comment on the rumour, but did say it had ambitions to develop its freight business through the Channel Tunnel and it would consider all options that would allow it to do so.

SNCF said it had nothing to say, while Freightliner was unavailable for comment.

 The FT report said that First Group was considering selling GBRf, which it had taken over as part of its acquisition of GB Railways in 2003, because it had been seeking to reduce its debt since it took over Laidlaw International, the US owner of the Greyhound bus brand.

Sources said Freightliner looked best placed to buy GB Railfreight, while SNCF also remained a contender as it looked to gain a foothold in the UK market. The French company had tried to enter the UK market by attempting to buy rail and bus operating firm Arriva, but eventually lost out to DB.

Tony Berkeley, chairman of the Rail Freight Group (RFG), said First GBRf had a good service performance record and strong reputation in the sector. However, it was unclear at this stage what effect the sale would have on the UK’s freight market.

He said: “The Rail Freight Group completely supports free competition on the rail network and we would be concerned by any reduction in customer choice, should First GBRf be taken over by any existing rail freight operator.

“While it is doubtful there would be any direct competition issues arising from its sale, GBRf does a good job for its customers and it would be sad to see the name go.”

He added that the Office of Rail Regulation (ORR) would handle any competition concerns should they arise.

Christopher Snelling, head of global supply chain policy at the Freight Transport Association (FTA), said it would prefer GBRf to be taken over by an independent company rather than one of the larger players as it advocated more choice in the market.

He explained that, in terms of competition, it was useful to have smaller players as customers wanted tailored services and small firms were better placed to do that. However, if a new owner made a major investment in GBRf, then it could have a positive outcome for the UK rail freight industry.

GBRf's current contracts include a five-year intermodal deal with MSC to move boxes from the port of Felixstowe to the Hams Hall terminal in the Midlands.

GBRf also has a 12-month rolling deal with forwarder Allport, moving boxes from Felixstowe to the Birmingham Intermodal Freight Terminal.