Latest Rail News

06.02.18

Stagecoach and Virgin awarded West Coast extension despite East Coast failure

The transport secretary has this week confirmed a two-year extension to the Virgin Trains West Coast contract despite admitting the East Coast franchise, run by the same two companies, is months from collapse.

Chris Grayling said the decision had been planned for more than a year, as a transitional step in the move from the current TOC system to the new West Coast Partnership.

While the failing Virgin Trains East Coast is mainly run by Stagecoach, its west coast counterpart is 51% controlled by Virgin and is operating profitably, according to Grayling.

He said that this joint venture had agreed on a deal to operate the West Coast mainline which will run from 1 April 2018 possibly until 31 March 2020.

The decision has been heavily criticised by opposition MPs, with shadow transport secretary Andy McDonald calling the move a “handout to private shareholders at the public’s expense.”

“That Chris Grayling awarded a profitable contract to Virgin and Stagecoach on the west coast while simultaneously confirming the same companies have collapsed on the east coast shows government policy is in chaos,” McDonald said.

“This is yet another Tory handout to private shareholders at the public’s expense. Failing train companies should not be awarded future contracts, but this government is rewarding them for failure by extending their lucrative deal.”

In a House of Commons debate, Grayling reminded MPs that the west coast franchise will be responsible for the first HS2 passenger services and explained that the extension had always been part of government plans.

“Let me be absolutely clear that the East Coast and West Coast franchises should not be confused,” he explained.

“As with the East Coast franchise, the west coast operator is meeting all its financial obligations, but the West Coast franchise has a completely different corporate structure, in which Virgin Trains is the majority shareholder.

“As was set out 14 months ago, the direct award is a sensible bridge between the existing contract and the west coast partnership. Once that partnership is ready, the direct award will cease to exist.”

The secretary also explained that there are no legal grounds to stop Stagecoach bidding for future government contracts, such as the East Midlands franchise, which one of its subsidiary companies has been shortlisted for.

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Comments

Andrew Gwilt   06/02/2018 at 11:21

It’s all falling apart for Stagecoach/Virgin Trains. I think both East Coast and West Coast franchises could allow other bidders such as Abellio, MTR, Trenitalia, Govia/Go Ahead or Arriva to take over the 2 franchises. First Group, Govia or Trenitalia could take over the West Coast franchise. And Abellio, MTR or Govia to take over the East Coast franchise. Or let Jeremy Corbyn take over the East Coast and West Coast rail franchises and he could also re-nationalise and reinstate our railways. As always #BringBackBritishRail

Dick Branston   06/02/2018 at 13:43

Or Mr Gwilt we can live in England in a country that will not be bankrupted by Corbyn. Let’s hope JC never gets in power.

Neil Palmer   06/02/2018 at 15:14

With the franchise extension effective in less than 2 months what other possible option is there? I was going to say that's something all those concerned with nothing but scoring political points are forgetting, but of course they aren't forgetting at all - they simply care about nothing BUT scoring political points.

Andrew Gwilt   06/02/2018 at 17:48

Well I think Mr Corbyn would do a excellent job on nationalising the railways and maintain the railways without any foreign rail franchise completely messing our railways up and to bring in new trains to replace the old.

Not Quite....   06/02/2018 at 22:51

Well Andrew on your line of thinking I can guarantee that bovine effluent is the next surprise on Masterchef and Middle Wallop FC will win the FA Cup. Can you please inform us where the immortal J. Corbyn Esq is going to find the billions necessary to "buy back" the Railways into public ownership? Should we take that money from Education, Defence or the Health Service?

Mikeb   06/02/2018 at 23:42

@Andrew. The shortlisted bidders for the West Coast have already been announfed; 1. First and Trenitalia. 2. MTR and Gùangshen Railway Company. 3. Stagecoach, Virgin & SNCF.

Andrew Gwilt   06/02/2018 at 23:53

Gùangshen Railway Company. Never heard of them. Are they from South Africa.

Lutz   07/02/2018 at 04:02

Rather moronic to suggest that we go back to nationalisation; the operator would still have the same problems but the customer would suffer having been made subject to the whims of activists with the added insult that the operator could not be removed for its failings. Instead, the railways must be broken-up and full privatised with the TOCs owning and operating the infrastructure under a shared-services centric model.

Cosmo   07/02/2018 at 07:40

Andrew, you have already told us you don't do "researching". Here's a Wikipedia link to make it easy for you: https://en.wikipedia.org/wiki/Guangshen_Railway_(company)

Andrew Gwilt   07/02/2018 at 14:36

Thank you Cosmo.

Mark Hare   07/02/2018 at 15:32

Andrew - As always #BringBackBritishRail Really? As always, utter tosh from you. Nothing if not predictable.

Andrew Gwilt   07/02/2018 at 23:40

Don’t like my option Mark Hare. I couldn’t even care less about your’s.

Foaming Stoat   08/02/2018 at 17:25

'let Jeremy Corbyn take over the East Coast and West Coast rail franchises' I don't think he has prequalified and nor does he hold a Franchise Bidding Passport. I don't expect he has sufficient collateral for bonding, nor holds a current operator's licence. This may rule him out, but I'm no expert. F.Stoat (Miss)

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