De-railed East Coast mainline to return to private sector

Despite the train wreck of collapsed franchise deals recently, the government has invited companies to bid for the publicly owned London-to-Scotland route, returning it to the private sector.

by Michael Northcott
Last Updated: 18 Oct 2013

The process of sorting out mainline rail routes has been so catastrophic over the last year, you’d think that the government would want to sort out some issues before getting onto the next franchise bidding process. But it has decided to get the publicly owned east coast line back in private hands within two years - presumably to get it through before the next general election.. 

The Department of Transport has operated the route since November 2009 – that’s when National Express pulled out – but transport minister Patrick McLoughlin today announced a new bidding competition to re-franchise the route. He hopes that the new company will be operating the route as a private business by February 2015.

It is thought that ministers are trying to draw a line under the west coast mainline fiasco last year, where FirstGroup won the bid against incumbent Virgin Trains, but then the contract had to be scrapped after a series of screw-ups by DfT civil servants was uncovered. 

Virgin boss Richard Branson will be particularly pleased with this latest outcome, because it means that the existing West Coast franchise between London and Scotland (which Virgin Rail currently runs) will be extended by almost two-and-a-half years to April 2017. This is to stop a clash between the east coast and west coast franchise bidding processes. So without even trying, Virgin Rail has bagged another chunk of time in the cab.

Furthermore, it's looking good for Branson as far as the east coast line is concerned. The government will be keen to make sure that yet another raily company doesn't walk away from the franchise. It has twice been ditched by the private sector - National Express ditched it in 2009, and GNER pulled into the sidings two years prior to that. For this reason, the next deal is likely to contain pretty favourable terms, and Virgin is one of the few companies that has managed to keep its nose clean as far as efficient running is concerned.

Defending his decision to re-franchise the east coast route again, McLoughlin said: ‘Franchising has been a force for good in the story of Britain's railways, transforming an industry that was in decline into one that today carries record numbers of passengers.’ Tell that to any commuter and they’ll throw you in front of the next train. If it ever arrives.

Manuel Cortes, chief of the Transport Salaried Staffs’ Association union, said: ‘The Tories are just like the Bourbons when it comes to rail – they ignore all the lessons of history. The £50m west coast line fiasco revealed that private franchises are a shambles.’

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Subscribe

Get your essential reading delivered. Subscribe to Management Today