Latest Public Sector News

28.08.12

Greening confirms WCML contract will go to FirstGroup

Transport secretary Justine Greening has confirmed that the Government plans to sign the West Coast Main Line contract with winning bidder FirstGroup, despite opposition from Virgin Trains, Labour and members of the public. 

She suggested that if Virgin had won the competition they would have been “perfectly happy” with the process. 

The chair of the Transport Select Committee has written to Greening, calling for a delay in the confirmation of the contract until Parliament returned and MPs can scrutinise the bidding process. 

FirstGroup bid £5.5bn for the route, and concerns have arisen regarding the deliverability of such high financial payments. 

Sir Richard Branson, founder of Virgin Trains, offered to run the service “for free” while a review was carried out, if this impacted on the December start of the franchise. Sir Richard has also criticised the DfT for failing to prioritise a deliverable bid over one with high returns and has threatened to launch a judicial review over the bidding process.

An online petition against the decision has now reached over 100,000 signatures, which means it could be eligible for a debate amongst MPs. 

In a letter to Greening, shadow transport secretary Maria Eagle wrote: “The decision appears almost exclusively a ‘bottom line’ one, driven by a particularly high pledge of payments to Government. 

“You will know of the history of franchise contracts being brought to an early end, at least in part because of over-ambitious payment promises that proved impossible to realise. There are fears that lessons have not been learnt.” 

But Greening told BBC Breakfast: “We do plan to push on with signing the contract with FirstGroup and I do suspect that, although I have a huge amount of respect for Virgin and the work they have done on the line, I suspect that, had they won the bid, they would have been perfectly happy with the process.” 

And FirstGroup has asserted it will deliver better value for taxpayers. Chief executive Tim O'Toole said: “We are pleased that the DfT has reiterated that our winning bid was selected by a fair, rigorous process that scrutinised best value and deliverability and that they concluded that no reason has been advanced to convince the DfT not to sign the agreement.” 

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