Uncertainty over rail line future

The Perth-based Stagecoach-led East Coast rail franchise could soon be taken over by government officials after it was announced the current arrangement, which was originally supposed to last up until 2023, can only last another“very small number of months”.

Transport secretary Chris Grayling told MPs last week the Edinburgh to London line could end up being run by the Department for Transport (DfT) as it became clear Virgin Trains East Coast - a joint venture 90 per cent owned by Stagecoach with the Virgin Group controlling 10 per cent could not meet its financial commitments to the government under the existing agreement.

Mr Grayling had already previously announced the original contract would be terminated three years early in 2020 after Virgin Trains East Coast admitted overbidding for the franchise by pledging to pay £3.3 billion to run the line until 2023.

The DfT is now expected to choose between two options available to it after it assesses the costs: either let Stagecoach continue to run the line on what Mr Grayling described as a “short-term, not-forprofit basis”or take it over and run it themselves.

Mr Grayling was quoted last week as saying:“It is now clear that this franchise will only be able to continue in its current form for a matter of a very small number of months and no more.”

Talking about the option of having the DfT run the rail line he added: “This option is very much on the table and will be selected if the assessment that I have set out determines that it offers a better deal for passengers and a better deal for taxpayers than the alternative.”

Mr Grayling was also reported as saying there was“no question of a bailout”for Stagecoach, which has apparently incurred losses of £200m through the franchise.

Shadow transport secretary Andy McDonald reportedly said last week: “[This] announcement ... is yet another monumental misjudgement to ad to a growing list of miscalculations by this secretary of state.”