Services have been cancelled during a pay dispute

A pay dispute at ScotRail has twice seen the entire rail network in Scotland brought to a standstill as train drivers staged one-day strikes.

The row has seen the services operated by ScotRail reduced by a quarter since the beginning of January as drivers refuse to work overtime or rest days.

A new attempt is being made on Thursday to break the deadlock, with talks chaired by the conciliation service Acas between management and unions in Glasgow.

The SRA will pay the money to National Express, which runs the ScotRail franchise and the Central trains operation in the English Midlands, East Anglia and parts of Wales.

The transport group has seen a drop in income at its franchises resulting from disruption on the rail network after the Hatfield crash in October 2000, which caused long-term speed restrictions and disruption.

Under the deal, National Express will make an up-front payment of �59m to the SRA.

Future development

In return the group will receive �115m from the rail authority over the next two years, to enable it to continue running at the existing levels of service.

This amounts to a �34m handout for ScotRail with Central trains receiving �22m.

BBC transport correspondent Tom Symonds says the reason behind the "give-and-take" approach is largely to do with public relations.

Under these circumstances, both parties to the deal are seen to be contributing financially.

ScotRail's franchise has still to be renegotiated

SRA chairman Richard Bowker said: "It has long been clear that the financial basis for the regional franchises was unworkable - a situation compounded by Hatfield and the foot-and-mouth outbreak, which affected tourism revenue."

Scottish Transport Minister Wendy Alexander said that without the deal, services on the Glasgow-Edinburgh, Edinburgh-Aberdeen, Glasgow-Stirling, Fife-Glasgow, the far north Kyle, North Berwick and Bathgate lines were all at risk.

She said that ScotRail was operating many services at levels above those agreed in the 1997 franchise.

"This deal ensures that ScotRail is able to provide the service Scottish rail passengers expect for the next two years and paves the way for a new long-term franchise providing higher service levels.

"The executive can now plan ahead to the next franchise with contractualised higher level of services."

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