Rail franchises operators & contracts

27.11.18

DfT denies ‘experimenting’ with new East Coast Partnership, promises better franchise bids assessment

The DfT has defended its reportedly experimental plans for the refreshed East Coast Main Line franchise, arguing that its process for assessing bids is now “more robust” after a critical report into the failings that led to the collapse of Virgin Trains East Coast.

Chris Grayling announced in May that the publicly-owned London North Eastern Railway (LNER) would replace Virgin East Coast, with the DfT eventually planning to launch the East Coast Partnership in 2020.

But MPs from the Transport Committee accused Grayling in September of conducting an “experiment with this partnership” and urged the transport secretary to lay out in detail how the new approach would work, including by conducting a proper assessment of its feasibility.

They stated that the assessment should demonstrate how the proposal will offer better value for money and improved passenger outcomes compared to other ways of operating, with the decision to go ahead with the partnership put on hold until a full review is carried out.

The committee’s inquiry into the failure of the previous East Coast franchise said the blame laid primarily with Virgin and Stagecoach but found that the DfT was partially responsible for “not managing the bid process effectively enough,” as well as encouraging overbidding.

They also accused Grayling of pressing ahead with the proposed changes without proper consideration of whether it would provide a better service and said they were “concerned that future operations on a major part of the UK’s network will be captive to a concept for which there is no plan or impact assessment.”

In response, the government said it has taken steps to amend its approach to assessing the risks and feasibility of franchise bids, with a “more robust” system now in place to assess the validity of a bid.

The DfT argued that rather than experimental, the new approach will be designed by Network Rail and LNER in the context of the independently-chaired partnership board, and will therefore be “developed by people with a real understanding of the railway.”

“Proposals, where necessary, will need to go through the respective decision-making processes of Network Rail, LNER and DfT, to ensure delivery of the government’s objectives and value for money for the taxpayer,” it added.

The DfT declined to outline an exact timescale for the creation of the East Coast Partnership, claiming it was an “evolutionary process, not a single date.”

Virgin East Coast was due to run the franchise until 2023 but quit in June 2018, marking the third failure of the East Coast Franchise in just over 10 years.

Image credit - Rui Vieira/PA Wire/PA Images

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