GERMAN state-owned company Arriva retained its Cross Country rail franchise yesterday in a decision branded a “public scandal” by rail unions. Arriva, owned by Germany’s national railway Deutsche Bahn, will run the franchise until October 2019, the Department for Transport (DfT) announced. Under the new deal, the DfT has set “tough new targets” for improved punctuality and reliability on the services, which run between Aberdeen and Penzance, Bournemouth and Manchester and Stansted and Cardiff. There will also be 39,000 more seats at peak times on the Edinburgh to Plymouth route through Leeds, Birmingham and Bristol by December 2017, the DfT said. Journey times from Birmingham to Manchester will be cut by nine minutes on weekdays and 12 minutes at weekends. However, the announcement was condemned by rail unions. RMT general secretary Mick Cash said: “It is a public scandal that Arriva was handed this contract on a plate without UK state-owned Directly Operated Railways (DOR) even being considered to run this service. “DOR has a proven track record of running services for less money and with any profits being pumped directly back into the UK railway system. “Instead, the German state-owned railways Deutsche Bahn will continue to reap profits at the expense of the long-suffering Cross Country passengers.” Mr Cash argued that Arriva retaining the franchise “will not represent value for money” and that the 39,000 increase in seats is an annual figure, which actually amounts to 107 seats a day. RMT said it understood that DOR was on standby to take over the contract, which could have saved the taxpayer £100 million. Mr Cash accused the government of giving “corporate welfare” to the German state to the tune of £30m at a time when Germany’s banking system is on the ropes. Mick Whelan, leader of Aslef, the train drivers’ union, called the announcement “yet another reminder that the rail franchising model has failed. “It shows that, four years on from the West Coast franchise debacle, government rail policy remains in disarray. “Direct awards are now the new normality in the rail industry and only entrench short termism and underinvestment. “Today’s news highlights the total absence of leadership or guidance in the rail industry. There is only managed decline masquerading under the guise of retrospective investment. “When is the government going to start delivering for the taxpayer and travelling public? Safety and security must come before failed dogma.” Arriva also operates the Northern and Chiltern Railways franchises as well as trains in Wales. The DfT said Arriva Cross Country would pay the government a premium of £163m to operate the franchise until October 2019.