LONDON (Reuters) - Britain said it would nationalise Northern Rail after the company running trains between cities like Manchester and Leeds was blamed for years of delays, cancellations and strikes on the service.

Slideshow ( 2 images )

Britain privatised its railways in the 1990s, but over the last three years some contracts with private companies have become problematic, and this is the second renationalisation in two years.

Transport Minister Grant Shapps said on Wednesday that the current model was struggling and needed to change.

The coming weeks could will be critical for the UK’s rail network, as a government decision on whether to proceed with the country’s biggest rail project, HS2, is expected, and the way rail contracts work is revamped.

As a result of poor performance on Northern Rail, Shapps said that a public-sector operator would take over its running from March 1, axing a contract with Arriva, owned by Germany’s Deutsche Bahn, five years early.

Northern Rail passengers have had to endure years of delays and cancellations due to strikes, driver shortages, timetable issues, plus problems associated with delays to the delivery of new trains, and old, creaking infrastructure.

But commuters would now see an improvement, promised Shapps, adding that a shake-up of the whole sector was on the way.

“It is clear that the current model is now struggling to deliver...We know change is needed, and it is coming,” he said, referring to a review by former British Airways boss Keith Williams.

RAIL SHAKE-UP

A decision on HS2, an 80 billion pound-plus project to improve the UK’s rail links, is due to be made by the Prime Minister on Thursday, BBC political editor Laura Kuenssberg said on Twitter.

Critics of the railways say investment is needed to improve rail lines, which in some areas are old and neglected, and in others are full-up to bursting with no capacity to add services.

HS2 would build new track between London and northern England, adding capacity and slashing journey times, and allowing the UK to catch up with European countries like France and Spain which have extensive high-speed rail networks.

Meanwhile the Williams review of the railways is also due to be published in weeks, with the aim of overhauling a system of failing contracts, where private companies are too dependent on rising passenger numbers and fail to meet financial targets.

Northern’s nationalisation follows that of the London to Edinburgh route, known as the East Coast Mainline, in 2018, and more could follow. Another franchise, South Western, operated by British transport company FirstGroup and Hong Kong-based MTR Corp, is also in financial difficulty.

Arriva won the Northern franchise, which mainly provides commuter services in the north of England in 2015, and the contract had been due to run until 2025.

The company apologised to Northern Rail passengers. “The scale of the challenges we faced outside of our direct control were unprecedented, particularly around delayed or cancelled infrastructure projects and prolonged strike action,” it said.