UK Transport secretary, Patrick McLoughlin, has announced the cancellation of the contract awarding the West Coast mainline rail franchise to First Group.
The government has scrapped the contract after an investigation by the UK Department for Transport discovered major flaws in the franchise process.
Virgin Trains, a UK-based train company, had earlier commenced court proceedings against a decision by the Department of Transport to award the West Coast Main Line franchise to FirstGroup, a Scotland-based transport company.
Virgin Trains has been operating the railway service since 1997, but the Department for Transport awarded the new franchise contract for December 2012 to 2026 to First Group. Angered by the decision, Virgin had collected around 150,000 signatures for a campaign to force a parliamentary discussion to debate the granting of the contract to First Group.
Following the concerns raised, the Transport Select Committee has decided to hold a hearing into the competition for the rail franchise.
The new transport secretary, Patrick McLoughlin, said, ‘I have had to cancel the competition for the running of the West Coast franchise because of deeply regrettable and completely unacceptable mistakes made by my department in the way it managed the process.
A detailed examination by my officials into what happened has revealed these flaws and means it is no longer possible to award a new franchise on the basis of the competition that was held.
I have ordered two independent reviews to look urgently and thoroughly into the matter so that we know what exactly happened and how we can make sure our rail franchise programme is fit for purpose.’