The Department for Transport says it will negotiate with Virgin Trains for the operator to continue operating the West Coast line on a temporary basis, when its current franchise ends on December 9.
The government had awarded the West Coast mainline franchise to First Group, but the contract was subsequently cancelled “following the discovery of significant technical flaws in the way the franchise process was conducted” (see online news October 3).
The DfT says its intention is that Virgin will remain as the operator “for a short period – expected to be between nine and 13 months – while a competition is run for an interim franchise agreement”.
This interim agreement will be open to all bidders, and will then run “until the new long term West Coast franchise is ready to commence”.
Announcing the decision Transport Secretary Patrick McLoughlin said:
“The cancellation of the InterCity West Coast franchise is deeply regrettable and I apologise to the bidders involved and the taxpayer who have a right to expect better.
“My priority now is to fix the problem and the first step is to take urgent action to ensure that on December 9 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 has also ordered two independent reviews into the flaws in the bidding process.
The first will be “an urgent independent examination into the lessons to be learned from the department’s handling of West Coast competition”, conducted by independent advisers and overseen by Centrica chief executive Sam Laidlaw and former PricewaterhouseCoopers strategy chairman Ed Smith, both of whom are DfT non-executive directors. An initial report is expected by the end of this month.
The second review will be undertaken by Eurostar chairman Richard Brown, and will “examine the wider rail franchising programme”, looking in detail “at whether changes are needed to the way risk is assessed and to the bidding and evaluation processes, and at how to get the other franchise competitions back on track as soon as possible” This report will be delivered by the end of this year.
Report by Mark Caswell