Rail franchises operators & contracts

11.04.19

Branson says Virgin Trains could be gone by November after ‘baffling’ DfT franchise decision

Virgin Trains could disappear from Britain’s railways by the end of the year, Sir Richard Branson has announced after the government disqualified its joint franchise bid with Stagecoach.

Branson he was “devastated” by the decision after Virgin, which is 49% owned by Stagecoach, has “led the industry” for over two decades.

The DfT disallowed Virgin’s joint bid with Stagecoach and France’s SNCF to renew the West Coast rail franchise because the bid was “non-compliant” with pension rules.

Stagecoach also bid for the South Eastern franchise and to renew its East Midlands franchise, but both were rejected and the latter has now been awarded to Abellio.

The government said the company had “repeatedly ignored the rules” and was “responsible for its own disqualification, whilst Stagecoach said it was “shocked” and requested an urgent meeting with the DfT.

In a blog for Virgin, Branson said that the disqualification means Virgin Trains could be gone from the UK in November.

He said: “We’re baffled why the DfT did not tell us that we would be disqualified or even discuss the issue – they have known about this qualification in our bid on pensions for months.

“We have significant concerns over the latest developments and their implications for the future of the UK rail market. We are still looking closely at the decision and we are now considering our options.”

Branson highlighted the Virgin Trains’ 90% customer satisfaction rating in the National Rail Passenger Survey and pointed to the delivery of new trains, automatic delay repay, and tripling passenger journeys compared to 1997.

The disqualification stems from a row over pension rules, with the Pensions Regulator estimating the UK rail industry will need an additional £5-6bn to plug a pensions shortfall.

Stagecoach claims the government has taken a “higher-risk approach” to pensions with private operators taking the risk instead of the industry’s proposed solution.

Branson agreed, stating “we can’t accept a risk we can’t manage – this would be reckless” and added that forcing rail companies to take these risks could lead to the failure of more rail franchises.

In a separate statement, a Virgin Trains spokesperson said it was “very disappointed by the DfT’s unexpected decision” and was studying it carefully to understand why it had taken this action.

Comments

There are no comments. Why not be the first?

Add your comment

 

rail technology magazine tv

more videos >

latest rail news

BTP and Network Rail warn drone pilots after ‘dangerously close’ incident in Surrey

26/04/2019BTP and Network Rail warn drone pilots after ‘dangerously close’ incident in Surrey

Network Rail and British Transport Police (BTP) have issued a warning to drone pilots to keep away from railway tracks after one incident in Surr... more >
‘No justification’: Buckinghamshire councils demand government halt HS2 prep work until Notice to Proceed given

26/04/2019‘No justification’: Buckinghamshire councils demand government halt HS2 prep work until Notice to Proceed given

Councils across Buckinghamshire have agreed to pass a special motion calling on the government and HS2 to halt all current site work in the count... more >
Crossrail to open by March 2021 as bosses confirm new timetable without Bond Street

26/04/2019Crossrail to open by March 2021 as bosses confirm new timetable without Bond Street

The Elizabeth Line will open by March 2021 at the latest as a new six-month delivery window for the Crossrail’s crisis-hit central section ... more >

editor's comment

23/01/2018Out with the old...

Despite a few disappointing policy announcements, especially for the electrification aficionados amongst us, 2017 was, like Darren Caplan writes on page 20, a year generally marked by positive news for the rail industry. We polished off the iconic Ordsall Chord (p32), hit some solid milestones on Thameslink (p40), progressed on ambitious rolling stock orders (p16), and finally started moving forward on HS2 (p14) ‒ paving the way for a New Ye... read more >

last word

Encouraging youngsters to be safe on the railway

Encouraging youngsters to be safe on the railway

This summer, Arriva Group's CrossCountry and the Scout Association joined to launch a new partnership to promote rail safety among young people. Chris Leech MBE, business community manager at the... more > more last word articles >

'the sleepers' daily blog

A strengthened rail supply chain

26/04/2019A strengthened rail supply chain

Ahead of TransCityRail Midlands, We caught up with strategic partner PTS Training academy to find out more about how they are plugging the skills gap building a well-equipped workforce across the industry.  Where do you think the main areas for investment are across the Midlands? Industries are constantly evolving and growing. T... more >
read more blog posts from 'the sleeper' >

comment

Changing the London skyline with HS2

26/03/2019Changing the London skyline with HS2

Lisa Hogben, HS2 programme delivery manager for area south enabling works, explains how the arrival of HS2’s first tower cranes shows chang... more >
Picking up the pace with high-speed track handovers

26/03/2019Picking up the pace with high-speed track handovers

In 2018 Steve Featherstone, programme director of track at Network Rail, set his team a challenge to secure 100 high-speed track handovers in a y... more >
26-30 Railcard: taking advantage of opportunities

19/03/201926-30 Railcard: taking advantage of opportunities

After a nine-month national trial, the rail industry launched its seventh National Railcard for 26-30-year-olds on 2 January 2019. Rail Delivery ... more >
Caledonian Sleeper: a railway icon re-imagined

19/03/2019Caledonian Sleeper: a railway icon re-imagined

The world-renowned Caledonian Sleeper, due to begin operations at the end of spring 2019, completed its first Scotland to London journey earlier ... more >

rail industry focus

View all News

interviews

Women in rail - is the industry on the right track?

12/03/2019Women in rail - is the industry on the right track?

RTM sits down with Samantha Smith, sole female member of the TransPennine Route Upgrade Alliance Leadership Team, to find out more about encourag... more >