Posted 10th September 2012 | 4 Comments
Branson to step up attack on DfT today
THE COMMONS Transport Committee is to take the first evidence about the disputed award of the West Coast franchise today. Richard Branson is expected to tell the MPs on the committee that the DfT's franchising process is flawed, ahead of a preliminary hearing of his grievances by the High Court.
Sir Richard and Virgin Trains CEO Tony Collins are set to tell MPs that the FirstGroup bid, worth £5.5 billion, is too optimistic, and that its acceptance demonstrates serious flaws in the Department for Transport's franchising process.
FirstGroup CEO Tim O'Toole and the head of FirstGroup's rail division Vernon Barker are due to defend their bid for the 13 year and 4 month contract as deliverable.
Evidence will then be heard on Wednesday from the new transport secretary Patrick McLoughlin and the DfT's permanent secretary Philip Rutnam.
A date is still awaited for the preliminary hearing into Virgin's petition for a High Court judicial review. Virgin lodged papers on 28 August, just one day before the FirstGroup contract was due to be signed.
The DfT has admitted that the process must now stay on hold until the legal position becomes clearer, but FirstGroup has said that it is continuing to prepare for the scheduled takeover of West Coast on 9 December.
Reader Comments:
Views expressed in submitted comments are that of the author, and not necessarily shared by Railnews.
Jason Jones, Ashford
More unnecessary expense - new rebranded staff uniforms, new train liveries, new rebranded station signage, new rebranded stationary, new branded website across 500+ miles of railway!! And Mr McNulty wonders why the railways cost 5 times more than BR did to run! Oh yes, not forgetting how much that cost too...
James Palma, London
What I find interesting are the following:
The First Group Rail monopoly - When First take over operation of the WCML they will cover virtually the whole of the west coast with most services from the south coast of England to the North Coast of Scotland (First WCML, First Capital Connect, First Great Western, First Trans Pennine Express, First Scotrail)
Where is all of the money coming from to pay the government AND the shareholders AND for new trains? - the passengers naturally, hence even more fare hikes
This clearly demonstrates that a re-think is required on railway structuring and the franchise system. Does it really gie value for money? doubtful.
Graham, Hook
First "handed back the keys" at the end of their term, they opted not to take advantage of an option to extend it.
Which given that if they hadn't the electrification of many of their lines and the new trains would been happening at the same time as a change in the franchise seams reasonable. Otherwise it could have lead to FGW make all the choices about the trains and then a new company takes over and runs them; whilst as it is now whoever wins the franchise makes the choices about the trains & then runs them.
Paul Bamford, Ticehurst
Despite now living in deepest East Sussex, I hold a Season Ticket at Stoke City regularly clocking-up around 8-10,000 miles a year commuting on the Virgin Pendolino Service and am extremely concerned by the latest news regarding franchise renewal for the West Coast Rail Route.
With 40 years professional management experience I can vouchsafe that in any ‘purchasing’ scenario the lowest cost option is not necessarily the best because sustainable quality and reliability of service are often sacrificed and consequently in any quotation situation an offer that appears to be too good to be true always is. Any entity can put forward a proposal purporting to provide a seductive headline return but it is a completely different matter to be able to sustain such an unrealistic wafer-thin or even non-existent operating margin right to the finish line especially over a longer-term arrangement.
It beggars belief that a bid would even be considered from a party who has a poor track record having previously undertaken a similar franchise and notoriously ‘handed back the keys’ when the frailties of their unrealistic proposal were exposed to all and sundry leaving the British Government with egg on its face. Surely after having their fingers burnt with franchisees being unable, or maybe unwilling, to fulfil their contractual obligation, the necessity for any successful party to put up some form of Performance Bond should surely have been mandatory. Yet here we are offering a ‘second chance’ to a bidder with obvious ‘previous form’ that should have precluded them from receiving any invitation to tender sine die.