UK Govt to renationalise West Coast Main Line

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  By a Newsnet reporter

The UK Government is planning to renationalise the West Coast Main Line in order to wrest control of the operation from current franchise holders Virgin.  The move is an attempt to avoid a delay in the handover of the 14 year long contract to rival operator First Group, who controversially won the recent bid to take over the vital rail link.

After losing the bid, Virgin announced it would seek a judicial review of the UK Government’s decision not to renew the Virgin franchise.  The legal challenge could have delayed the handover of the network to First Group when Virgin’s contract expires on December 9 this year. The move by Virgin could potentially delay the handover indefinitely.  

Later this week, Virgin boss Richard Branson will appear before the influential House of Commons Transport Committee to put his case for retaining the franchise.  It is expected that Mr Branson will highlight a number of past franchising failures and will warn the UK Government against repeating the same mistakes.

The part of First Group’s bid which has most provoked the Virgin chief’s wrath is the promise by First Group to pay huge sums to the Government in the final years of the contract, these sums considerably exceed the amount the company would have to pay the UK Government for not complying in full with the contract.  Mr Branson argues that this gives First Group a massive incentive to bail out on the franchise before it expires.

The East Coast line between Edinburgh and London and Scotland was renationalised in 2009 after the operating companies GNER and then National Express, which took over the service, claimed that they were unable to foot the massive running costs of the operation.

A spokesperson for the UK Department for Transport would only say that the department was “looking at our responsibilities under section 30 of the Railways Act and it is only prudent to increase our focus on contingency planning”.

The Department for Transport declined to comment further.

A judge will decide within the next few weeks whether Virgin have a strong enough case for a judicial review to go ahead.