Campaign to delay west coast rail decision gathers steam

Virgin Trains’ owner Sir Richard Branson dubbed the franchise system “insane” after the Department for Transport (DfT) announced last week that his company had lost out to FirstGroup in the battle to operate a new 13-year west coast franchise from December 2012.

The final contract papers for the deal are expected to be signed by Transport Secretary Justine Greening on Tuesday.

But Louise Ellman, the chairman of the House of Commons Transport Committee, has written to Ms Greening asking her to hold off signing the final contract.

In the letter, Mrs Ellman said the west coast ruling raised “important issues about the basis on which decisions on major rail franchises are made”.

She added that she wanted time to raise the matter with her committee colleagues and that she was proposing a possible public oral evidence session of the committee on the subject of west coast on 11 September.

‘Past failures’

Mrs Ellman also said in the letter that she expected committee members would want to ask about the west coast franchise when Ms Greening gives evidence to the committee on the work of the transport department on 12 September.

Another select committee chair has also expressed concern about the decision.

Margaret Hodge, chair of the Public Accounts Committee, said she and her colleagues will want to make sure that the department has learnt the lessons from “past failures to secure value for money”.

Mrs Hodge said the committee had expressed concerns before about the department’s ability to predict accurate passenger numbers and in considering the impact of economic conditions on train operator’s revenue.

“Questions over their capability have now been raised again and whilst we welcome healthy competition it is essential that the Department has exercised proper due diligence in the letting of this franchise,” he added.

Virgin, which has operated the west coast line since 1997 and has more than doubled annual passenger numbers over 15 years, has backed an e-petition calling on the government to reconsider the franchise award.

Celebrity backers

The campaign has attracted some celebrity names including double Olympic champion Mo Farah, The Apprentice presenter Lord Sugar and celebrity chef Jamie Oliver. On Friday afternoon the number of signatories had passed the 100,000 mark which means the issue could now be debated in the parliament.

But the DfT has suggested that a rethink and a role for the committee in the decision are unlikely.

A DfT spokesman said: “Once a decision has been made it is in the public interest and the commercial interests of bidders for the identity of the winning bidder to be made known promptly.

“Our published processes and criteria do not provide for a role in a live procurement exercise for the transport committee, which has not requested any kind of dialogue on this issue before now.

“However, the secretary of state is due to appear in front of the select committee in early September and will be happy to talk about the business of her department.”

FirstGroup has said that its plans for the west coast franchise include improved wifi and catering, as well as additional services and more seats and reducing standard walk-on fares by 15 per cent on average.

A spokesman said: “We have a long and proven track record in running rail services and will be delivering better value for taxpayers. We look forward to welcoming all customers to their new and improved service from December.”

In May 2011, FirstGroup chose not to extend its First Great Western rail franchise three years early. At the time, analysts said that the company had been very astute in that of the £1.13bn FirstGroup had undertaken to repay during the course of the franchise, £828m was due in the final three years. The company CEO Tim O’Toole said that the decision not to take up its option on the final years of the deal was to allow FirstGroup to negotiate a longer-term deal.