The future of Lancashire’s West Coast Main Line rail link has been thrown off track after ministers scrapped a deal which would have seen Sir Richard Branson’s train company lose the route.
In a shock u-turn on Wednesday morning, the Department for Transport (DfT) confirmed it was cancelling the decision to award the route to FirstGroup on December 9.
Transport Secretary Patrick McLoughlin said he was cancelling the competition “because of deeply regrettable and completely unacceptable mistakes made by my department in the way it managed the process”.
Sir Richard had mounted a legal challenge to the decision by the Department for Transport (DfT) to award a new 13-year franchise between London and Scotland, which has Preston as a major hub station where Virgin employs 450 people.
Mr McLoughlin said the DfT would no longer contest the judicial review and had paused all outstanding franchise competitions pending two independent reviews he has set up.
Sir Richard, who had described the bidding process as “flawed” and “insane”, welcomed the decision and said he he was hopeful Virgin would carry on running the franchise which it has been operating since 1997.
FirstGroup said it was “extremely disappointed” at the news, saying it had submitted “a strong bid, in good faith and in strict accordance with the DfT’s terms”.
House of Commons Transport Committee chairman Louise Ellman, the former Labour leader of Lancashire County Council, said she was “astonished” by the development and said it put the whole franchising process “in disarray”.
In a blog, Sir Richard confirmed he had been called by Mr McLoughlin to make the announcement late on Tuesday night.
He added: “I am pleased to say that the DfT has looked at all of the facts and found significant flaws in the way it’s officials handled the process.
“They have basically acknowledged that what we had been saying is correct.”
In its statement, Virgin added: “We are 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 DfT in ensuring continuity of service for the millions of customers who depend on train services on the West Coast mainline.”
A FirstGroup statement said the Government had confirmed the group was “in no way at fault, having followed the due process correctly” during the bidding process.
It added: “We submitted a strong bid, in good faith and in strict accordance with the DfT’s terms.”
The bid for the West Coast, which also operates trains through Lancaster, began last year when the Government invited bidders to challenge Virgin for the right to run the service it has operated since 1997.
In August, the DfT announced its intention to award the route to Aberdeen-based FirstGroup sparking a petition of more than 150,000 signatures calling for the decision to be reconsidered.
Virgin then annoucned it was beginning High Court proceedings for a judicial review into the decision which then-Transport Secretary Justine Greening said the government would fight.
On September 10, the Transport Select Committee takes evidence from Sir Richard, FirstGroup chief executive Tim O’Toole and DfT officials in the wake of the franchise row.
The Virgin boss describes his rival’s bid as “absolutely preposterous.”
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Saturday 18 May 2013
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