Awards, contracts & appointments

11.07.19

Richard Branson calls rail franchising “a real mess”

The owner of Virgin Trains, Richard Branson, has claimed the railway franchising system is "a real mess" and is too constrictive against rail operators.

After a dispute with the Department for Transport (DfT) over who should be responsible for pension risks, Virgin were disqualified from rebidding to operate the line in April.

The contract to run the West Coast Main Line, managed by Virgin Train for 22 years, will end in March 2020.

Mr Branson believes that train companies should contribute to the pension deficit instead of agreeing to an open-ended risk.

In an interview with the BBC, Mr Branson said: "I'm very disappointed for everybody who works for Virgin Trains, they've done an extraordinary job over twenty-two years.

“It’s sad that a great company may be coming to an end."

Mr Branson also confirmed that Virgin Trains are seeking an ‘open access’ agreement for the operator on the West Coast Main Line, which would let the company operate a reduced service.

"The Department for Transport, in their wisdom, give you massive long lists of dos and don'ts, and it's very difficult to be entrepreneurial.

A spokesperson from Department for Transport said: "We are sorry to see Virgin leave the UK rail industry having failed to put forward a compliant bid.

"Other companies have done so and the remaining bidders in current competitions clearly see an ability to be entrepreneurial on the railways.

"The recent winning bid on the East Midlands franchise accepted the pensions terms and will deliver significant benefits for passengers, transforming their journeys."

(Picture: Hahn Lionel/PA Images)

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