15.10.12
Virgin gets West Coast franchise extension after DfT fiasco
West Coast incumbent Virgin will be asked to continue to run services for 9-13 months, after the decision to award the contract to FirstGroup was overturned.
The Government is planning to enter negotiations with Virgin for a temporary contract whilst a new competition is run. The decision was cancelled on October 3, after “technical flaws” came to light in the process.
Other franchises up for renewal have also been suspended and are under review. The estimated cost of reimbursement for the scrapping of the contract is £40m.
DfT said: “The Government believes that this is the best way to ensure services are maintained and that there is no impact on passengers.”
Transport secretary Patrick McLoughlin was making a decision about whether the DOR should run the line, or whether Virgin’s contract should be extended. It is believed that there was not thought to be enough time to transfer all staff, contracts and rolling stock before December 9.
FirstGroup has not ruled out a legal challenge over Virgin being granted an extension.
McLoughlin said: “My priority now is to fix the problem and the first step is to take urgent action to ensure that... services continue to run to the same standard and passengers are not affected.
“I believe Virgin remaining as operator for a short period of time is the best way to do this and my officials and I will be working flat out to make this happen.”
McLoughlin will announce further details of the new contract this afternoon in the House of Commons. The next franchise competition is expected to be an interim agreement that will run for only two years, with a longer-term contract to be let at the time of the next general election.
RMT general secretary Bob Crow commented: “Richard Branson and his shareholders are laughing all the way to the bank. This short term political fix will not detract from the call for rail to be run as a public service free from the chaos and greed of privatisation.
“We could end up with the nightmare of three different franchise holders in a few years on our most high profile rail route while tens of millions of pounds is wasted on the franchise merry go round and thousands of staff are caught in the cross fire.”
FirstGroup said today: “We believe the private sector provides the most effective and efficient way to deliver passenger rail services in the UK. We await the outcome of the independent investigations into the West Coast franchise competition and the wider rail franchising process, which we hope will provide a greater degree of certainty and confidence not only to future bidders but to employees, stakeholders and the travelling public too.”
A Virgin Trains spokesman said: “Our customers have made clear they want us to continue our excellent service and we now have the chance to deliver that and offer customers some short-term continuity.
“We will now be working hard to make sure we continue to provide the service that has made us successful. We are grateful for the fantastic support from customers and staff over recent months.”
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