Transport chiefs told to get rail franchises right for HS2

THE award of new rail franchises has to be carried out to maximise the potential of the proposed £32bn HS2 high speed rail link.

Reports have claimed that Chancellor George Osborne has told transport ministers to make sure the best franchises are in place in order to give HS2 the best chance of success.

The move puts pressure of Transport Secretary Justine Greening to make sure only the best tenders are accepted.

The first of the big franchise bids, the West Coast main line, is likely to be a battle between the incumbent Virgin Rail and FirstGroup.

Speculation emerged over the weekend that FirstGroup may have bid around £7bn to run the London to Glasgow service franchise, which will operate for the next 14 years from next year.

However, Virgin boss Sir Richard Branson is understood to be angry about the bid as it is thought to undercut Virgin by around £1bn and he has written to Ms Greening claiming the rival bid is unrealistic and threatens the viability of the route.

He has suggested, according to reports, that the Government could face an embarrassing repeat of the East Coast fiasco when National Express was forced to pull out of its contract because it could not operate the line successfully.

The pressure is on for the high speed rail link as it cannot afford any further setbacks.

Concerns were raised earlier this year when the scheme failed to be included in the Queen’s Speech and this was followed by claims civil servants had branded the proposals too risky because of delivery problems.

Then last month, a report to the Public Accounts Committee predicted the taxpayer is likely to be burdened with an additional £4.8bn for the cost of the first stage of the high speed rail network between London and the Channel.

The committee blamed the Department of Transport for being overly optimistic about the number of passengers who would use the service.

The committee has said more accurate predictions should be achieved for HS2 before any consent is given for the £32bn network to proceed.