The Department for Transport has scrapped plans for a bidding competition for the franchise to run Great Western rail services.
The competition was one of three put on hold last October in the wake of the fiasco over the flawed awarding of the West Coast Main Line franchise.
Current operator First Great Western has had its contract extended until October and negotiations will start on a new two-year contract with the company, while plans for the longer term will be set out in the spring.
Meanwhile, operators of the two other franchises – Thameslink, Southern & Great Northern and Essex Thameside – will be offered interim two-year contracts while competitions are launched for longer-term franchises..
The department will grant a 28-week extension to the current Thameslink/Great Northern franchise operated by First Capital Connect after it ends in September and negotiate on a two-year extension.
The franchise competition for a seven-year contract to run the service will be resumed
The competition for the Essex Thameside franchise, currently operated by c2c, will be resumed with a revised invitation to tender for a 15-year franchise issued to existing short-listed bidders over the summer.
The announcement was made in a statement to Parliament by Transport Secretary Patrick McLoughlin on the day of a highly critical report on the Government’s handling of the £5bn West Coast Main Line franchise competition.
FirstGroup was told it had won its bid to take over the franchise from Virgin Trains, but the decision was scrapped after the discovery of “significant technical flaws” in the way the procurement was conducted.
A committee of MPs said the Transport Department embarked on an “ambitious, perhaps unachievable” reform in haste, and claimed that ministers and senior officials were lied to.
The DfT has estimated that the collapse of the competition and subsequent inquiries cost the taxpayer around £48 million, as companies demanded compensation for the cost of submitting bids.