Branson hits out at Network Rail

SIR RICHARD BRANSON has blamed Network Rail’s delayed upgrade to the East Coast mainline for cutting short control of the franchise and claimed he and partners Stagecoach had lost more than £100m between them.

Sir Richard, whose Virgin Trains has a 10pc stake in the East Coast joint venture with Stagecoach, accepted the duo had pledged to pay £3.3bn to the Government over eight years up to 2023. But the Government last year allowed Virgin Trains East Coast to hand the keys to the franchise back three years early, which Labour peer Lord Adonis said would mean it avoiding paying roughly £2bn of that sum.

Lord Adonis quit his chairmanship of the Government’s national infrastructure commission last month. The Virgin owner did not dispute the £2bn figure in his blog but stated his company’s initial bid was based on “key assumptions and a promise of a huge upgrade of the infrastructure” by Network Rail, which has been dogged by delays.

These have, Sir Richard argued, impeded Virgin Trains East Coast from running more trains and carrying more passengers. “The considerable delays to this upgrade, to new trains, as well as poor track reliability will cost us significant lost revenue and torpedoed the assumptions of our original bid,” he said. “As facts became clear about these issues, a discussion with Government had to take place and a solution needed to keep delivering improvements and investment.

“The critics argue my partners at Stagecoach and I are somehow benefiting. The fact is we have both lost well over £100m, and not received a penny in dividends.”

The East Coast mainline has a chequered history, with National Express being stripped of the contract by Lord Adonis when he was transport secretary in 2009. He set up a governmentcontrolled company to take on the franchise.