Rail move ‘will not af­fect tax­pay­ers’

Manchester Evening News - - NATIONAL -

RAIL ser­vices on the East Coast Main Line will be brought back un­der pub­lic con­trol fol­low­ing the ter­mi­na­tion of the fran­chise agree­ment with Virgin Trains East Coast (VTEC).

Trans­port Sec­re­tary Chris Grayling said ser­vices on the line be­tween Lon­don and Ed­in­burgh will be over­seen by the Depart­ment for Trans­port (DfT) from June 24, un­til a pre­vi­ously-an­nounced pub­lic-pri­vate part­ner­ship run­ning both trains and track op­er­a­tions is in­tro­duced in 2020.

He told the House of Com­mons that the par­ent com­pa­nies of VTEC – Stage­coach and Virgin – had “got their bid wrong” in terms of the rev­enue from the fran­chise, which was orig­i­nally due to run un­til 2023.

Crit­ics claim the de­ci­sion to end the £3.3 bil­lion con­tract early is a “bailout”, but Mr Grayling in­sisted that “tax­pay­ers have not lost out” and it is only the pri­vate firms that have “made losses at this time”.

He had con­sid­ered per­mit­ting Stage­coach to con­tinue run­ning trains on a not­for-profit ba­sis un­til 2020 and per­mit them to earn a per­for­mance-re­lated pay­ment at the end of a new deal.

But he opted for an Op­er­a­tor of Last Re­sort (OLR) con­trolled by the DfT, to “be­gin the tran­si­tion” to the pub­lic-pri­vate body named East Coast Part­ner­ship.

The OLR func­tion is pro­vided by a group of pri­vate com­pa­nies con­sist­ing of Arup, SNC-Lavalin Trans­port Ad­vi­sory (In­terFleet) and EY. They will op­er­ate un­der the name of “one of Bri­tain’s iconic rail brands”, the Lon­don North Eastern Rail­way (LNER), Mr Grayling said.

Stage­coach chief ex­ec­u­tive Martin Grif­fiths said the firm was “sur­prised and dis­ap­pointed” by the de­ci­sion as it be­lieved its plans of­fered a “pos­i­tive, value-for-money way for­ward for pas­sen­gers, tax­pay­ers and lo­cal communities”.

He pledged to “work con­struc­tively with the DfT and the OLR” to en­sure a “pro­fes­sional trans­fer” to the new ar­range­ments.

Mr Grayling said there would be no im­pact on pas­sen­gers or train staff as the switch would be “no dif­fer­ent from a nor­mal fran­chise change”.

He added that he has re­ceived “of­fi­cial ad­vice” that re­stric­tions should not be placed on Virgin and Stage­coach’s “pass­port” which en­ti­tles them to bid for fu­ture rail fran­chises, as “there is no sugges­tion of ei­ther mal­prac­tice or ma­li­cious in­tent”.

VTEC is the third pri­vate op­er­a­tor to fail to com­plete the full length of a con­tract to run ser­vices on the East Coast route.

GNER was stripped of the route in 2007 af­ter its par­ent com­pany suf­fered fi­nan­cial dif­fi­cul­ties, while National Ex­press with­drew in 2009. Ser­vices were run by the DfT for six years up to VTEC tak­ing over in 2015.

Shadow trans­port sec­re­tary Andy McDon­ald said Mr Grayling had “gifted” Stage­coach and Virgin a “£2 bil­lion bailout” af­ter they failed on the main line, adding: “And he has the au­dac­ity to come to that despatch box and say it’s not rea­son­able to re­move or place con­di­tions on their pass­port. Ab­so­lutely lu­di­crous.”

Chris Grayling

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