West Coast Main Line deal will go ahead, Greening says
- 28 August 2012
- From the section UK Politics
Transport Secretary Justine Greening says there will be no delay in signing a new West Coast Main Line contract, despite pressure to review it.
Mrs Greening said the government would "push on" with the 13-year contract with FirstGroup, which was a "good deal for taxpayers".
There has been pressure from Virgin Rail, which currently runs the line, and from Labour to give MPs a chance to examine the contract process.
The signing could happen on 29 August.
FirstGroup, under the name First West Coast Limited, will take over the franchise from 9 December and is due to operate the service until 2026.
Virgin's Sir Richard Branson had offered to run the service "for free" while a review was carried out. His company said it was considering a number of options, including seeking a judicial review.
FirstGroup has said it would bring in key improvements for passengers, including cutting standard fares by 15%, but critics fear it would not be able to afford the £5.5bn it was paying for the franchise.
Speaking to BBC Breakfast, Mrs Greening said all bidders had "bought into" the "fair and well-established process". She claimed that if Virgin had won the bid it would have "been perfectly happy with the process".
She added that the FirstGroup deal - which will provide more seats, more capacity and new services to places like Telford and Shrewsbury - had been looked at in a lot of detail and was "deliverable".
"If we want to move away from above-inflation fares, when it comes to franchising lucrative lines we've got to get a better deal for taxpayers, and that's what we've done," she said.
The process had taken 15 months, and Virgin Rail had raised its concerns "right at the end", she said.
More than 150,000 people have signed an online petition calling for the decision to be reconsidered.
In a letter to Mrs Greening, shadow transport secretary Maria Eagle said FirstGroup's bid was "significantly higher than any other bid" and the decision seemed to be "almost exclusively a 'bottom line' one, driven by a particularly high pledge of payments to government".
"You will know of the history of franchise contracts being brought to an early end, at least in part because of over-ambitious payment promises that proved impossible to realise.
"There are fears that lessons have not been learnt," she wrote.
Labour's Louise Ellman, who chairs the House of Commons transport committee, has also written to Ms Greening asking her to delay signing the contract.
On Sunday, Sir Richard told the BBC he wanted a proper examination of the facts and said if reviewing the decision meant the December handover had to be postponed, his company and transport company Stagecoach would be willing to continue operating the rail lines while donating any profits to charity.
"If the figures stack up, we'll bow out gracefully... but what should not happen is, the Department for Transport shouldn't rush through, get this signed and keep all these facts under cover," he said.
'Fair and rigorous'
Chief executive of FirstGroup Tim O'Toole said he was pleased the Department for Transport had reiterated that its winning bid was selected by a "fair, rigorous process that scrutinised best value and deliverability".
"And that they concluded that no reason has been advanced to convince the DfT not to sign the agreement," he said.
Sim Harris, the managing editor of Rail News, said the industry was "very broadly divided" on the issue, with some deeply critical of Virgin, and others deeply critical of FirstGroup.
He said FirstGroup's bid was "very ambitious" but the company "firmly believed" it could boost revenues by improving the way cheaper tickets were sold and getting more people on trains.
He also said there was "sense across a good deal of the industry that there was a certain amount of impatience with the way Virgin, Sir Richard Branson, [have] handled this".
Aberdeen-based FirstGroup already operates a number of rail routes, including Great Western and ScotRail.
The West Coast Main Line route serves 31 million passengers travelling between London, the West Midlands, the North West, North Wales and the central belt of Scotland.
Virgin has run the franchise since 1997, during which time passenger numbers doubled.
FirstGroup has said it would introduce 11 new 125mph six-car electric trains on the Birmingham to Glasgow route and provide more direct services between destinations, as well as introduce better wi-fi and food.