Government weighs up two options for East Coast

Government is reviewing two options regarding the future of the East Coast franchise.

Rail Minister Jo Johnson said on March 12 that the options were either to allow Stagecoach to continue operating the service under a very strictly designed short-term arrangement, or for the franchise to be directly operated by the Department for Transport through an operator of last report.

In a Commons Written Reply to Alex Sobel (Labour, Leeds North West), Johnson said: “The Department will choose the option that offers best value for money for taxpayers and protects the interests of passengers. This assessment is ongoing, and a conclusion of the best option has not yet been reached.”

Johnson said that since Stagecoach and Virgin started operating the EC franchise in March 2015, all financial commitments for the taxpayer had been met, with almost £1 billion paid in premiums.

He reiterated Secretary of State for Transport Chris Grayling’s claim that Virgin Trains East Coast will run out of funds soon, and that it would “only be able to continue in its current form for a small number of months and no more”.

Five days earlier, the RMT union had claimed that DfT was preparing to award the deal to “greedy privateers” Stagecoach and Virgin.

RMT General Secretary Mick Cash said: “This is Chris Grayling putting Tory privatisation ideology before the public interest. We always knew this government would never allow East Coast to be taken back under public ownership, and the sooner Grayling stops this charade the better.”

VTEC had been due to end in 2023, but the decision was made in November ( RAIL 842) to introduce the East Coast Partnership from 2020. The financial problems affecting VTEC have meant that Government must now step in earlier than planned ( RAIL 845).