Stagecoach boss ‘surprised and disappointed’ by East Coast Mainline franchise axe
The Transport Secretary Chris Grayling has confirmed that the East Coast Mainline, which runs through Lincolnshire and Nottinghamshire, is set to be renationalised.
As we reported earlier this week, Grayling had been set to make the announcement before the weekend.
The East Coast rail franchise, which runs through Grantham and Newark, is run by Stagecoach, which owns 90% of the franchise, and Virgin, which owns 10%.
In a statement to the London Stock Exchange, Stagecoach confirmed the move. The company said: “We have now been advised by the Department for Transport that the Secretary of State for Transport plans to announce today that he intends to appoint the ‘Operator of Last Resort’ (OLR) to operate the InterCity East Coast trains services.”
In February, Grayling said that Stagecoach had “got its numbers wrong” and that it would only continue to run the East Coast Mainline “for a small number of months”.
Grayling told the House of Commons he is recreating one of Britain’s iconic rail brands, the London North Eastern Railway (LNER) to run the line, which stretches from London to Edinburgh.
He said: “I am creating a new board with an independent chair to oversee the operation of the LNER route and work with my department on building the new partnership. It will have representatives of both the train operating team and Network Rail, as well as independent members who will importantly ensure the interests of other operators on the route are taken into account. I will appoint an interim chair shortly, and then begin the recruitment process for a long term appointment.”
Stagecoach Group chief executive, Martin Griffiths, said: “We are surprised and disappointed that the Department for Transport has chosen not to proceed with our proposals. We believe our plans offered a positive, value-for-money way forward for passengers, taxpayers and local communities, ensuring the continuation of the exciting transformation already underway on East Coast and a smooth transition to the Government’s new East Coast Partnership.
“However, we respect the Government’s decision. We will work constructively with the DfT and the OLR in the weeks ahead to ensure a professional transfer to the new arrangements, supporting our employees and maintaining the same clear focus on our customers as we have over the past three years.
“This decision should not detract from the hard work and dedication of our people at Virgin Trains East Coast, who have been central to the transformation we have been delivering for our customers over the past three years. During that time, we have attracted more passengers, greatly increased investment, achieved industry leading customer satisfaction and made significant payments to the taxpayer to reinvest in public services.
“Despite the news, we believe that we can continue to make a positive contribution to the UK rail market, delivering long-term customer benefits and sustainable returns for taxpayers and investors.”
