UK Government Announces Termination of West Coast Franchise

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.’

Virgin Trains Announces Legal Proceedings for West Coast Main Line Franchise

Virgin Trains, a UK-based train company, has commenced court proceedings against a decision by the UK’s 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 has awarded the new franchise contract for December 2012 to 2026 to First Group. Angered by the decision, the company has collected around 150,000 signatures for a campaign to force a parliamentary discussion over the allotting of the contract to First Group.

Confirming the legal action, a company statement said, ‘We have tried for three weeks to get clarity over the Department for Transport’s decision and to have a number of key questions answered. On each occasion we have been refused information.

We are left with no choice but to commence Court proceedings as we believe the procurement process has ignored the substantial risks to taxpayers and customers of delivering FirstGroup’s bid over the course of the franchise.’

Sir Richard Branson, the founder of Virgin Group, said, ‘We had hoped that Parliament or an external review would be able to scrutinise this badly flawed process before the franchise was signed. However that opportunity would be denied if the DfT follows through with its determination to rush through the process before Parliament returns next week.

That ignores the wishes of more than 150,000 people who signed the Downing St e-petition in 10 days, the Labour Opposition, two important Commons committees and many backbench Conservative MPs who wanted a debate before the decision is taken, not a post-mortem afterwards.

We have not taken this decision lightly, but it is the only course now available to try to unravel this sorry process.’

The company claims that the Department for Transport’s own review placed Virgin’s bid as more deliverable and at lower risk.

 

West Coast Rail Contract Will Be Signed, Says UK Transport Secretary

The new West Coast mainline rail franchise in the UK, which has recently been granted to First Group, a Scotland based transportation company, will be signed later this week despite growing controversy over the decision.

Virgin Trains, a UK-based train company and the present operator of the franchise, has been running an electronic signature campaign to press for a parliamentary discussion against the granting of the operation of the West Coast line to First Group. The campaign has collected around 100,000 signatures to date.

However, transport secretary, Justine Greening, has said that the new contract will be signed soon and there is no chance of it being delayed despite the pressure tactics for a review that are being exerted by Virgin Trains.

Ms Greening said in an interview with the BBC, that, ‘If we want to move away from above-inflation fares, when it comes to franchising lucrative lines we’ve got to get a better deal for taxpayers, and that’s what we’ve done.

We do plan to push on with signing the contract with FirstGroup and I do suspect that, although I have a huge amount of respect for Virgin and the work they have done on the line, had they won the bid, they would have been perfectly happy with the process.’

Earlier, Tim O’Toole, the chief executive officer of First Group, said, ‘We are delighted to be selected by government to operate this unique railway which connects communities across the country and plays a vital role in the UK’s economic growth.

Our winning bid is a deliverable proposition that is compelling for all who want to see a greater use of our rail networks. We will be making significant improvements including reduced journey times and introducing new direct services.’

Virgin Loses West Coast Rail Bid

Virgin Trains, a subsidiary of Sir Richard Branson’s Virgin group of companies, has lost in its bid to continue running the West Coast line rail services.

Virgin, which has been operating services on the line since 1997, has lost the franchise to First Group, a public transport company that is registered in Aberdeen, Scotland, following a government announcement today. First Group will now be operating the franchise from December this year until 2026.

The new incumbent has pledged to add capacity to the route, which constitutes the main arterial line between London Euston and Edinburgh, and incorporates the West Midlands, Greater Manchester, Liverpool, and Glasgow.

Sir Richard Branson has been predictably damning of the governments decision, saying that it was ‘very disappointing,’ while raising questions with regards to the amount of money that had won the bid for First Group.

It is believed that First Group bid between GBP6.5bn and GBP7bn, compared with Virgin’s GBP5.5bn to GBP6bn, and that the deal was sealed by its promise to improve services. But Branson commented that to bid more than Virgin had to secure the franchise would be ‘insanity’, and added, ‘We submitted a strong and deliverable bid based on improving customers’ experience, increased investment and sustained innovation. To have bid more would have involved dramatic cuts to customer quality and considerable fare rises, which we were unwilling to entertain.

We also did not want to risk letting everybody down with almost certain bankruptcy at some time during the franchise as happened to GNER and National Express who overbid on the East Coast mainline.’

Meanwhile, rail minister, Theresa Villiers, commented that the new franchise would, ‘deliver big improvements for passengers, with more seats and plans for more services.’