'Truth' row over East Coast line

Documents obtained under the Freedom of Information Act reveal National Express made it clear to the Department for Transport (DfT) in April and June last year it had severe problems and would not be able to continue with the franchise on the current terms.

Shadow Secretary of State for Transport Theresa Villiers claims Lord Adonis failed to disclose this information to the House of Commons or the House of Lords, instead telling a Transport Select Committee that no train operating company had "defaulted on its obligations" and the franchising system had "continued to prove its worth".

Ms Villiers said: "If National Express made it clear to the Department in April that they were in serious trouble, Lord Adonis's comments in June appear to be stretching the truth to its limit. On an issue as important as this, Lord Adonis should have been upfront with the House.

"These continuing revelations about what happened last year, behind the doors of the Department for Transport, leave Lord Adonis with serious questions to answer about his handling of the crisis."

In April, Ray O'Toole, Chief Executive of the UK Division of National Express wrote to Dr Mike Mitchell, Director General of Rail and Strategic Networks at the Department for Transport stating: "I am therefore writing to advise you, on behalf of the Board of National Express, that whilst we are not in breach of any term of the franchise agreement, we will not be able to continue with the NXEC franchise on its current terms."

Two months later National Express reiterated the need to withdraw from the franchise, saying the company had "no viable alternative" and the best way forward was for it to continue on a management contract until the franchise was re-tendered.

Later that month Lord Adonis gave his evidence to the Transport Select Committee and in July he told the House of Lords: "In respect of prior warning, it is fair to say that National Express had made its concerns about the viability of its East Coast operation clear to us over a number of months, but it was only in the immediate run-up to today and the trading statement that the company felt that it had to make on its half-year results that it told us firmly that it intended later in the year to default on its franchise commitments."

Later in July he was again quizzed by the Transport Committee, which put it to him that he did not disclose all of the information he could have about what was a "very significant matter".

Lord Adonis said the specific issue he was asked about was whether or not the Government was told there was an intention by National Express to default, and so he explained that it had not.

A DfT spokesman said: "At the time of the Transport Select Committee hearing in June National Express had not given notice that it intended to default."