Posted 28th August 2012 | 8 Comments
Virgin takes West Coast protest to court
VIRGIN TRAINS has started court proceedings against the Department for Transport, in a bid to delay the signing of the Intercity West Coast contract which was awarded to FirstGroup almost a fortnight ago.
In a statement, Virgin said: "Virgin Trains Limited has today commenced Court proceedings in respect of the decision to award the West Coast Main Line franchise to FirstGroup. We have tried for three weeks to get clarity over the Department for Transport's decision and to have a number of key questions answered. On each occasion we have been refused information.
“We are left with no choice but to commence Court proceedings as we believe the procurement process has ignored the substantial risks to taxpayers and customers of delivering FirstGroup's bid over the course of the franchise.
"In addition it has ignored the DfT's own assessment that VTL's bid was more deliverable and a lower risk. We question whether FirstGroup’s bid has been correctly risk adjusted by the Department given all of its supposed incremental value is delivered after 2022.
“The current process is geared to selecting the highest risk bid and needs to be independently audited to prevent a repeat of former franchise failures."
Virgin founder Richard Branson said: "We had hoped that Parliament or an external review would be able to scrutinise this badly flawed process before the franchise was signed.
"However that opportunity would be denied if the DfT follows through with its determination to rush through the process before Parliament returns next week.
"That ignores the wishes of more than 150,000 people who signed the Downing St e-petition in 10 days, the Labour Opposition, two important Commons committees and many backbench Conservative MPs who wanted a debate before the decision is taken, not a post-mortem afterwards.
"We have not taken this decision lightly, but it is the only course now available to try to unravel this sorry process."
Virgin's action follows a statement by transport secretary Justine Greening earlier today that she intended to close the deal after the end of a 14-day 'cooling-off' period which ends at midnight tonight.
Ms Greening had remained unmoved by the threat of legal action from Virgin, which had also offered to run West Coast on a 'not for profit' basis to give time for the award to be reviewed. Virgin founder Richard Branson, who has described the DfT's method of assessing bids for rail franchises as 'insane', also said that his company will launch competing air services from London to Manchester and Scotland.
Ms Greening had insisted that the DfT would 'push on' with completing the deal, which she said was a good one for taxpayers.
FirstGroup responded to Virgin's legal challenge by saying: "We have every confidence in the DfT’s process which is rigorous, detailed and fair and in which bids are thoroughly tested. There has been no complaint about the process, which was carefully described in advance, until Virgin Rail Group had lost commercially.
"Our focus is to ensure a smooth transition with continuity for staff and passengers alike. We want to get on with delivering the many benefits and improvements we are offering without delay or disruption. We will continue to prepare for a successful start up of the new franchise on 9 December 2012."
Reader Comments:
Views expressed in submitted comments are that of the author, and not necessarily shared by Railnews.
Martin Lee, Lancashire
Come back Intercity West Coast and Ivor Warburton
J LYON, shropshire
Virgin refused to run trains to Shropshire. First agreed to run trains to Shrewsbury and other destinations!
Billy Bell, Beith, UK
How many times do we need to audit the bid? There is no need for a delay to review the first group bid, the audit was done during the bidding process for the franchise. It's sour grapes for Virgin, nothing more nothing less. Do people really think Branson cares more about the taxpayer getting value for money than lining his own pockets?
Just to clear up another point, Virgin rent the trains from a leasing company. They did not buy them and therefore first group will now lease the trains.
It was a fair process until Virgin lost, don't forget!
Mark Rice, London
Not looking forward to First replacing the comfy seats and replacing them with their tight and restrictive seats they introduced on Great Western. FGW replaced their IC125 interiors with high capacity seating with justified claims that there were no spare MkIII coaches and that there are no stabling facilities to house 9+10 coach trains (plus the two class43's) on their network.
WC however has the stabling and station capacity to cope with 11 coach units so cramming more people into tighter seats will, in my opinion reduce passenger numbers as the travelling experience will diminish. I find it difficult working on FGW trains because of the cramped conditions and if these changes are brought in on WC, I will probably revert back to flying.
Windsorian, UK
Whether the claim by Virgin is right or wrong, the trouble is that it has struck a chord with the British public; we've seen what has happened with other franchises where the TOC has in effect just walked away.
Instead of a court case it would make far more sense if all three parties agreed to a temporary delay to the contract award, until the Audit Commission had conducted an urgent inquiry.
Considering the national importance of the WCML the British public deserve a fair independant inquiry without the usual political back stabbing.
miller, cardiff
i can't see the reason that the goverment has decided that they need to change the franchise when virgin have spent millions of pounds on new pendelenos and ne w trains. It seem to me that now the network has been upgraded to a high standard that the goverment wants to milk every pound they can get out of the railways.
JBI Mc kirgan, Glasgow
I don't agree with the change I am afraid
First won't be able to do a good job
Billy Bell, Beith, UK
Virgin have lost all dignity now.