Monday, October 15 09:43:41
The British government faced fresh humiliation over a botched competition to run the country's west coast rail service today, when it asked Virgin to continue operating the line on an interim basis, only weeks after choosing a rival company. A 13-year franchise deal, due to commence in December, had originally been granted to FirstGroup ahead of the incumbent Virgin Trains, but the government was forced to pull the award earlier this month when it discovered serious flaws in the way it had run the process.
The Department of Transport is now asking Virgin to continue operating the service, which runs from London to Scotland, for a further nine to 13 months from December, while it runs a competition for an interim agreement, it said on Monday. "The cancellation of the InterCity West Coast franchise is deeply regrettable and I apologise to the bidders involved and the taxpayer who have a right to expect better," said Transport Secretary Patrick McLoughlin.
"My priority now is to fix the problem and the first step is to take urgent action to ensure that on the 9 December services continue to run to the same standard and passengers are not affected." FirstGroup, which had made a 5.5 billion pounds ($8.9 billion) bid to run the franchise, has seen its shares slide over 20 percent since the deal was scrapped. Virgin Trains - a venture between billionaire businessman Richard Branson's Virgin Group and Stagecoach - had offered 4.8 billion pounds to continue with the franchise, and had mounted a legal challenge when it lost, claiming the winning bid was "ridiculous". ( C) Reuters