‘Significant errors’ hit rail franchise process

The judgment came in initial findings from an independent inquiry into the halting of the West Coast bidding process.

The report was published yesterday by Transport Secretary Patrick McLoughlin, who decided earlier this month to scrap the West Coast bidding process, blaming mistakes by DfT officials.

In August, the DfT announced that transport giant FirstGroup, rather than Sir Richard Branson’s rail company Virgin Trains, had won the battle to operate a new 13-year West Coast franchise.

Sir Richard, whose company had run West Coast since 1997, dubbed the bidding process “insane” and launched a legal challenge to the decision.

Yesterday, senior business figure Sam Laidlaw, who is leading the first of the inquiries, asked the DfT to release the following statement: “In the limited time available this is necessarily only a preliminary report.

“What is clear, however, is that in seeking to run a complex and novel franchising competition process, an accumulation of significant errors, described in the report, resulted in a flawed process.

“These errors appear to have been caused by factors including inadequate planning and preparation, a complex organisational structure and a weak governance and quality assurance framework.”

Former Transport Secretary Justine Greening, who presided over the original FirstGroup decision, and her successor, Mr McLoughlin, have both defended the bidding process.

But it was while preparing to defend the Branson court challenge that mistakes in managing the West Coast bidding process were found.

Mr McLoughlin scrapped the bidding and suspended bidding on other franchises. Three DfT civil servants were suspended.

Mr McLoughlin also announced two independent inquiries – the first to look at the West Coast bidding process and the other to investigate franchise bidding generally.

Last night, Mr McLoughlin told MPs that the DfT was making good progress in its discussions with Virgin on how the company will operate the line “for a short period of up to 14 months while a competition is run for an interim agreement”.

A FirstGroup spokesman said: “The Secretary of State has repeatedly confirmed that FirstGroup is in no way at fault, having acted entirely in accordance with the DfT’s process throughout.”

The spokesman went on: “Nevertheless we are extremely disappointed and dissatisfied that, as a result of the Government’s reversal of its decision, taxpayers and West Coast passengers will not benefit from the better deal that our strong bid would have delivered.”