Branson to tell MPs West Coast bidding process was flawed
THE head of Virgin Rail, Sir Richard Branson, will tell MPs today why he thinks the decision to award the West Coast Main Line contract to FirstGroup is flawed.
Sir Richard has been invited to appear before the Transport Select Committee to outline his concerns following the government’s decision last month to strip Virgin of its operator status.
The entrepreneur believes the contract tendering process is in need of review and has claimed that FirstGroup will be unable to deliver on its promises because its bid is unsustainable.
FirstGroup boss Tim O’Toole is also expected to attend the hearing and tell MPs his company won the contract fair and square and any concerns over process should have been aired prior to the tender being offered.
The Government has yet to sign off on the new contract – due to begin in December – after Virgin challenged the decision in the courts.
The argument will be a test for Government policy and could dictate how future franchises are managed. It is also a test for new Transport Secretary Patrick McLoughlin, who has yet to get his feet under the desk at the Department for Transport after replacing Justine Greening in last week’s cabinet reshuffle.
Suggestions emerged over the weekend that the Government may be close to stipulating that all future bids for rail franchises must be accompanied by bank guarantees over risk capital so that the DfT can be more certain that bidders will be able to deliver on their promises.
It has apparently redrafted tender documents for the Great Western franchise in order to reflect this.
The DfT wants to avoid any further costly mistakes such as that which embarrassed Birmingham-based National Express when it was forced to hand back the franchise for the East Anglia when it became obvious that passenger usage would not provide the returns the company had been expecting.
Ironically National Express is one of the bidders for the Great Western franchise along with Arriva, Stagecoach and FirstGroup.
