Virgin Trains will continue to run West Coast rail line

Virgin Trains had lost out to rival transport company FirstGroup in the battle to operate a new 13-year West Coast franchise.

But with Sir Richard mounting a legal challenge to the Department for Transport (DfT) decision, the Government scrapped the franchise competition earlier this month after “significant technical flaws” were found in the franchise process.

FirstGroup had been due to take over services on the line from December 9. Yesterday, Transport Secretary Patrick McLoughlin said the DfT would negotiate with Virgin for the company to continue running West Coast services for a short period – expected to be between nine and 13 months – while a competition was run for an interim franchise agreement.

This interim agreement, which would be open to any bidders, would then run until the new long-term West Coast agreement was ready to commence.

Mr McLoughlin said Virgin remaining as an operator for a short period was the best way forward while Virgin said it would be working hard to “continue to provide a good service”.

But rail unions, which had hoped the Government would run West Coast in the public sector after December 9, slammed Mr McLoughlin’s decision.

Virgin has run West Coast since 1997 and Sir Richard was appalled when in August this year the DfT announced that FirstGroup would be taking over from this December. Questioning FirstGroup’s franchise promises and launching his legal challenge, Sir Richard had described the bidding process as “insane”.

It was while getting itself ready to fight the legal challenge that the DfT discovered the flaws in the bidding.

The DfT’s original decision was made when Justine Greening was transport secretary.

Both she and her successor, Mr McLoughlin, had defended the bidding process in the light of Sir Richard’s comments and legal challenge, with Mr McLoughlin telling a Commons Select Committee he was happy with the way the bidding had been conducted.

Mr McLoughlin said yesterday: “The cancellation of the InterCity West Coast franchise is deeply regrettable and I apologise to the bidders involved and taxpayers 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.”

The DfT has also paused the ongoing franchise programme including live competitions on Essex Thameside, Great Western and Thameslink and set up two independent reviews into what went wrong with the West Coast competition and the wider DfT rail franchise programme.