Posted 14th August 2012 | 4 Comments
Speculation grows about West Coast bids
SPECULATION is growing the Government is about to announce the winner of the next Intercity West Coast franchise, and that the incumbent Virgin Trains may have come second place after operating the route for more than 15 years.
Although there is still official silence it is widely expected that an announcement is imminent, and could be made as soon as tomorrow morning.
Industry sources are suggesting that FirstGroup has offered a premium of £7 billion for the 14-year contract, and that it has topped the Virgin bid by £1 billion.
But Virgin has tried to influence government thinking. Richard Branson wrote to transport secretary Justine Greening recently, and is said to have warned her that excessively optimistic bids could lead to failure.
Both GNER and National Express had to surrender the East Coast intercity franchise after their business plans proved to be unachievable, and at present the East Coast route is operated by a state-owned company until it can be relet next year.
It is also being reported that the Department for Transport has tried to shield itself and taxpayers from the consequences of another financial meltdown, by requiring a record 'performance bond' of £70 million from the successful West Coast bidder.
Rail unions, meanwhile, are concerned about a possible loss of jobs on the route, following rumours that First is planning to reduce staff numbers by as much as 600, accompanied by cutbacks to on-board services.
It has also been claimed that Alstom, who built and maintain the tilting Pendolinos on the route, has been asked to indicate the cost of abolishing the on-board shop and replacing it with more seating, although Alstom has refused to confirm this.
Apart from First Group and Virgin Rail Group, 49 per cent of which is owned by Stagecoach, the other bidders are the international arm of Dutch state railways and a partnership between the French state railway and Keolis.
Reader Comments:
Views expressed in submitted comments are that of the author, and not necessarily shared by Railnews.
Philip Russell, Carlisle
There is no need to suffer extreme stress as an employee of virgin if the new franchise goes bust then like East Coast the government steps in and runs things therefore basically garunteeing jobs whatever happens, so its probably one of the safest jobs in Britain right now, however i do feel sorry for staff on short or fixed term contracts as they will be an easy target for cuts, but some of the blame for that must surely go to the union as they should have done more to oppose this type of recruitment within virgin instead of putting so much effort into organising strikes over things like pensions ,rosters and the displacement of a few guards jobs where there were no proposal of redundancies on any of these issues.
Melvyn Windebank, Canvey Island, Essex
Pity Richard Branson did not set up his own TOC when he bought new trains for Cross Country and WCML he might now have got a better deal from the operator of new ECML or even simply be able to transfer Pendolinos to ECML if Virgin won that contract!!!
John Joyce, London
This will be an outrageous decision if made. Virgin Trains is one of the best operated train companies in all of the franchise agreements. I have been travelling on their services for years between London and Birminghjam and Manchester. Their service is unrivalled and far better than the First Great Western service to Bristol, Wales and the South West as the East Coast Services. This is pure political dogma I reckon when Sir Richard and Virgin have hardly screamed the pros of the Coalition from the rooftops..sour grapes on the Government's part I wonder?
Gordon Smith, glasgow
No-one has mentioned how much stress and anxiety it has put on top of staff nor has it ever been mentioned about ticket fares going up within the same category of the west coast franchise which according to the bbc are set to rise on all rail fares.