West Coast Main Line deal scrapped as Government admits getting its sums wrong (From The Westmorland Gazette)

West Coast Main Line deal scrapped as Government admits getting its sums wrong

9:38am Wednesday 3rd October 2012 in News By Steven Bell, Senior Reporter

THE row over who operates the West Coast Main Line has taken a dramatic twist after the Government cancelled its decision to award the franchise to FirstGroup.

Transport Secretary Patrick McLoughlin admitted his department had made ‘completely unacceptable mistakes’ in assessing risk levels in bids submitted by the company and its rival Virgin Trains.

As a result, FirstGroup, which only won the lucrative deal to run trains on the UK’s busiest railway in August, has been stripped of the contract and the bidding process will be re-run.

Government officals made errors in the way inflation and passenger numbers were taken into account and how much money bidders were then asked to guarantee as a result.

Westmorland and Lonsdale MP Tim Farron said: “I have always said that announcing the franchise decision during recess when MPs were not in Westminster and not able to properly hold the Government to account was unfair and unacceptable.

“Now we know that there were ‘technical flaws’ in the bidding process, I welcome that we have to start the process again.

“I don’t like how we got here, but I welcome the result.”

Mr Farron urged the Government to allow residents, passengers and commuters to have ‘a real say’ in the new bidding process.

In a statement, FirstGroup said: “We understand the Department for Transport (DfT) has ordered two urgent independent inquiries into the West Coast competition and the wider DfT rail franchise programme.

“Until this point, we had absolutely no indication that there were any issues with the franchise letting process and had received assurances from the DfT that its processes were robust and that it expected to sign the contract with FirstGroup soon.

“We are extremely disappointed to learn this news and await the outcome of the DfT's inquiries.

“The DfT has made it clear to us that we are in no way at fault, having followed the due process correctly.

“We submitted a strong bid, in good faith and in strict accordance with the DfT's terms.

“Our bid would have delivered a better deal for West Coast passengers, the taxpayer and an appropriate return for shareholders.”

Virgin Trains boss Sir Richard Branson, who lost out in the bidding process to FirstGroup, said Virgin had always been convinced the process had been flawed and called FirstGroup's bid ‘completely unrealistic’.

A Virgin Rail Group spokesman said: “We welcome today’s frank announcement by the Secretary of State, acknowledging the flaws in the way the InterCity West Coast competition was assessed and launching a review into franchising more widely.

“We are ready to play a full part in assisting the review to help deliver a franchising system that better serves passengers, taxpayers and the interests of all bidders.

“In the meantime, we will assist the Department for Transport in ensuring continuity of service for the millions of customers who depend on train services on the West Coast mainline.”