Posted 28th August 2012 | 5 Comments

Virgin warns DfT of West Coast legal battle

THE DEPARTMENT FOR TRANSPORT says it has received a letter from Virgin Trains which is a 'precursor' to legal action over the award of the Intercity West Coast franchise to FirstGroup. The transport secretary has confirmed that the contract is to be signed with First after the 14-day 'cooling-off' period expires at midnight tonight.

It is reported that lawyers were working with Virgin over the bank holiday weekend, paving the way for an application to the High Court for judicial review of the DfT's decision, although Virgin has yet to reveal whether it will take this path.

The transport secretary Justine Greening has remained unmoved by the threat 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 insisted that the DfT would 'push on' with completing the deal, which she said was a good one for taxpayers.

A spokesman for the DfT could not say when the final signing would take place, but agreed it could be as soon as tomorrow. He also confirmed that Virgin had given notice of the possibility of legal action. He said: "We are in receipt of a letter from Virgin Trains which is a precursor to legal action. We are reviewing the correspondence. The Department is confident in the process it undertook and the decision made in awarding the West Coast franchise."

FirstGroup is maintaining that its £5.5 billion bid is deliverable. First's chief executive Tim O'Toole said his company had won the competition for West Coast 'fair and square'.

There has yet to be any reaction from the Commons Transport Committee to today's developments. Its chairman Louise Ellman had called for confirmation of the contract to be deferred until her Committee had been given a chance to assess the Department's calculations and also hear evidence from the main parties involved.

Reader Comments:

Views expressed in submitted comments are that of the author, and not necessarily shared by Railnews.

  • Lee, Manchester

    To Richard Evans, and other who point out the number of signatures on the e-petition, the Government may well review the franchise decision, but even if it is found to be faulty, the Government can not publicly admit that. No government can admit they made the wrong decision when in power, even if they know they did so as by admitting they made such a mistake will potentially caqll in to question every other decision made. In such a circumstance, every decision made by the DfT would then be required to be similalry scrutinised, including the forthcoming electrification projects and rolling stock procurement decisions. Not only would this delay any 'commited schemes' it would cost the tax payer a fortune and call into question the credibility of the DfT and those within it. Hence, the Government is never wrong even when it is wrong. I believe there may have been a Panorama or similar programme a few years ago which looked at this very issue.

  • Claydon William, Norwich, Norfolk

    I doubt the DfT will ignore the e-petition; or have to worry about it. The e-petition @ 150k signiatures triggers a parliamentary debate, NOT a judicial review.

    The DfT can go ahead and sign-off the West Coast deal with 'First', without having to wait for the debate.

    It will be interesting to watch the Labour windbags in parliament doing their best to criticize the DfT about the very process that they set up when in government.

  • Richard Evans, Hinstock

    Is the Department of Transport simply planning to ignore the 150,000 signature e-petition for a review of the West Coast Franchise decision?
    It is now well over the target to qualify for a commons debate on the issue:. surely the decision should be delayed to allow that debate to take place first. Or do Justine Greening and her officials above parliamenty scrutiny?

  • Lee, Manchester

    Richard, your companys bid was rejected for whatever reasons and First groups was accepted. First group have an unenviable reputation regarding train travel (and buses for that matter), but Virgins record wasn't exactly faultless either. However, the decision has been made, whether it is a good decision or not. The DfT hath spoken and so has the Transport Secretary, both of whom believe the right decision has been made, do it must be true, honest. If the First Group franchise ends up going t*ts up, it is down to First Group and the DfT to sort it out. Virgin can sit back and say 'I told you so'! Virgin wont be required to rescue the franchise as the tax payer and train traveller will do that. But as a final parting shot, could you please answer the questions raised by others as to would you still be complaining as vociferously if you had one the franchise and, would you still be insisting on that rather convenient non-competition clause?

  • John Ruddy, Montrose

    The only grounds for a legal challenge were if they were able to show the process was unfair, biased in some way, or that the civil servants who were evaluating the bids knew which was which and were biased against him.

    I think he would find it very difficult, if not impossible to prove either.