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Thursday, 17 April 2014

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Government scraps West Coast Mainline deal with FirstGroup

A contract to run trains on the West Coast Mainline has been scrapped after flaws were found in the way the franchise process was conducted.

The Government is to re-run the tender competition meaning current operator Virgin Trains could yet keep hold of services on the route, which links Cumbria with Scotland and London.

It means the Department for Transport will not be awarding a franchise to run the West Coast service when the existing deal expires in December.

Aberdeen-based FirstGroup had been due to take over the running of the line after being awarded the 13-year contract in August.

Technical errors in the process have been cited by the Government for its decision. It is understood they were discovered while preparing for a legal challenge by Virgin, which had lost out to FirstGroup.

Civil servants are being blamed for the mistakes which will cost the Government millions as it will have to repay all of the bidders' costs.

Transport Secretary Patrick McLoughlin has ordered two independent reviews into the competition process. Reports are expected by the end of October and December.

He added the mistakes in the way the process had been handled were deeply regrettable and completely unacceptable.

An announcement is expected to be made later today about the suspension of government staff while the investigations are conducted.

The Government is “resolving urgently” the future arrangements for operation of the service, which was due to be handed over to FirstGroup on December 9.

Mr McLoughlin added: “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.”

The new tender competition will begin as soon as “the lessons of this episode are learned”, the Government has said.

FirstGroup said it was extremely disappointed and awaited the outcome of the two inquiries.

“The DfT has made it clear to us that we are in no way at fault, having followed the due process correctly," it added.

Virgin said it was "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 mainline.”

Have your say

Now then Rod, lets see if we can disassemble your thoughts. The shambles of the awarding of the west coast main line was carried out under the 2005 railways act. All the conditions of the awarding of the franchise etc.
The awarding of the franchises initially was done by an independent body. This worked fairly well. We have seen some pretty impressive improvements in the initial franchises.
The government in 1999 removed this independence and set up the strategic rail authority. The consequences were so appalling that the government were forced on their sword to abandon the SRA and took the whole awarding of franchises in house to the department of transport in the 2005 act.

This is where we are. You dont actually think a Minister of the Crown goes through all the contract awarding, goes through all the fine print, the due diligence etc? The tens of millions of pounds spent by the two companies bidding for the contract would have resulted in franchise documents five times the size of the Bible at least.

That is what civil servants do (under the 2005 act), they sift through the bids, check everything is correct and summarise the two bids to the minister with a probable recommendation.

The minister then makes a decision based on the information given to him.

Who would have thought that a bunch of civil servants (who are probably quite talented in other ways) could not manage such a large commercial undertaking?

This isnt the fault of a government or a minister. Your petty pathetic point scoring shows how sad and desperate you are.

This contract is worth around £13,300,000,000 (£13.3 billion). The difference between First Group and Virgin to the taxpayer was £2,200,000,000(£2.2 billion). In that context £40,000,000 (£40 million) is chicken feed, pennies in comparison.

So yes. If £40 million wasted results in a better deal overall, then it is money well wasted.

Posted by Bob on 8 October 2012 at 16:12

I bet most of the people moaning on here don't even catch the trains!!!

Posted by Alan Chinyer on 4 October 2012 at 12:55

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