Latest Rail News

03.10.12

‘We were right’, says Branson as McLoughlin apologises

The Government has cancelled the award of the West Coast franchise to FirstGroup after “technical flaws” emerged in the bid evaluation process, forcing the whole thing to be scrapped.

It is unclear this morning who will run services on the line after December 9 – Virgin or state-owned Directly Operated Railways.

New transport secretary Patrick McLoughlin called his department’s mistakes “deeply regrettable”. The DfT is expected to announce the suspension of officials involved in the process, and has confirmed it will no longer contest the legal case brought by Virgin.

The errors came to light as the DfT prepared evidence for a legal challenge brought by incumbent Virgin Trains after it lost out on the contract. Sir Richard Branson suggested that FirstGroup’s bid was unsustainable and was a recipe for financial disaster.

In a blog post, Sir Richard Branson said: “They have basically acknowledged that what we had been saying is correct. The same procedures were not followed and ‘deeply regrettable and completely unacceptable mistakes’ were made by the department.”

FirstGroup said: “We are extremely disappointed to learn this news and await the outcome of the DfT’s inquiries. The DfT has made it clear to us that we are in no way at fault, having followed the due process correctly.”

All bidders will be reimbursed in full for their costs relating to the tender process – which could cost the taxpayer as much as £40m – and a new competition for the contract will begin.

The Government will also pause three other rail franchise competitions currently out to tender – Greater Western, Essex Thameside and Thameslink – as it launched two reviews into the bidding process.

The first review will be led by Centrica chief executive Sam Laidlaw and former PricewaterhouseCoopers strategy chairman Ed Smith, which will examine the West Coast franchise in particular, and is due to report by the end of October.

A second review, led by Eurostar chairman Richard Brown, will investigate the wider rail franchising programme to see whether any changes are needed in the way risk is assessed. Brown is due to report by the end of December.

Previously the Government had suggested the West Coast line would be renationalised if the judicial review pushed back proceedings after December 9, rather than allowing Virgin to continue running services. Now that option has been left open, while the DfT stated it will not be FirstGroup.

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.

“West Coast passengers can rest assured that while we seek urgently to resolve the future arrangements the trains that run now will continue to run, with the same drivers, the same staff and timetables as planned. The tickets that people have booked will continue to be valid and passengers will be able to make their journeys as planned.”

He told the BBC’s Today Programme. “There are lessons that need to be learnt from this.”

Philip Rutnam, DfT permanent secretary, said: “The errors exposed by our investigation are deeply concerning. They show a lack of good process and a lack of proper quality assurance.

“I am determined to identify exactly what went wrong and why, and to put these things right so that we never find ourselves in this position again.”

Shadow transport secretary Maria Eagle accused the Government of “shambolic incompetence” and said the East Coast Main Line should not be put out to franchise and instead continue to be run by state-owned Directly Operated Railways.

A Virgin Rail Group spokesperson said: “We welcome today's frank announcement by the Secretary of State, acknowledging the flaws in the way the InterCity West Coast competition was assessed and launching a review into franchising more widely.

"We are ready to play a full part in assisting the review to help deliver a franchising system that better serves passengers, taxpayers and the interests of all bidders.

"In the meantime, we will assist the Department for Transport in ensuring continuity of service for the millions of customers who depend on train services on the West Coast Main Line."

Tell us what you think – have your say below, or email us directly at opinion@railtechnologymagazine.com


Comments

There are no comments. Why not be the first?

Add your comment

 

related

Rail industry Focus

  • 11/09/2019The next generation of rail infrastructure

    How the rail industry delivers the next generation of complex infrastructure will rely heavily on the people tasked with leading the projects, and the technology they use to do it. Faithful+Gould...
  • 11/09/2019Putting passengers first

    How does the rail industry design the railways for the next 40 years, and when it does, how do we make sure it’s all done with the passenger in mind? Jane Fisher joined three members of the Arup team...
View all News

Comment

The challenge of completing Crossrail

05/07/2019The challenge of completing Crossrail

With a new plan now in place to deliver Crossrail, Hedley Ayres, National Audit Office manager, major projects and programmes, takes a look at ho... more >
Preparing the industry to deliver trains for the future

04/07/2019Preparing the industry to deliver trains for the future

The move to decarbonise the rail network involves shifting to cleaner modes of traction by 2050. David Clarke, technical director at the Railway ... more >

'the sleepers' blog

Network Rail’s, Anna-Jane Hunter on HS2, NPR, and supply chain opportunities

29/08/2019Network Rail’s, Anna-Jane Hunter on HS2, NPR, and supply chain opportunities

Anna- Jane Hunter, is a ‘proud northerner’ and is passionate about continuing the investment and the success story of rail across the North.  She plays a key role in working with government and northern leaders to enable the net... more >
read more blog posts from 'the sleeper' >

Interviews

Andrew Haines, CE of Network Rail, tells BBC News his organisation could issue future rail franchises

24/06/2019Andrew Haines, CE of Network Rail, tells BBC News his organisation could issue future rail franchises

Andrew Haines, the Chief Executive of Network Rail, has told the Today programme on Radio 4's BBC’s flagship news programme that he would not rule out his organisation issuing future r... more >
Malcolm Holmes, executive director of West Midlands Rail Executive, announced as TCR Midlands speaker in Birmingham

24/06/2019Malcolm Holmes, executive director of West Midlands Rail Executive, announced as TCR Midlands speaker in Birmingham

Ahead of his appearance, Malcolm Holmes spoke with Rail Technology Magazine about what key leaders in the industry were doing to improve rail in the Midlands. He said: “It’s very... more >