West Coast Mainline deal failure criticised

A report into the collapse of the £5bn West Coast Mainline franchise deal has blamed a “damning failure” by the Department for Transport. The Laidlaw report was published hours after the government announced Virgin Trains will run the service for another 23 months – until 9 November 2014.

First Group was initially told it had won the bid. The tendering process was halted in October because of numerical mistakes – at a cost of at least £40m. Three Department for Transport civil servants, who were suspended after the scrapping of the bid, can now return to work.

Transport Secretary Patrick McLoughlin announced the latest, temporary, deal in a statement to the Commons. He also told MPs that the independent report into the collapse of the tendering process for the West Coast mainline “made extremely uncomfortable reading” for his department.

He said there was a “damning failure” by the Department for Transport, which had to be put right. The report had found “serious problems” and “unacceptable flaws”, he said. But Mr McLoughlin insisted that ministers had been given inaccurate reports and they had awarded the contract without being told about flaws in the bidding process.

He also announced a new hourly service between Glasgow and London, adding: “We are determined to ensure not only that passengers continue to experience the same levels of service they have in the past, but that services improve.”

Earlier, the government said the Department for Transport would be able to shorten Virgin’s 23-month contract “by up to six months if a subsequent franchise can be let on a shorter timescale”.
‘Shocking ineptitude’

The Department for Transport was forced to scrap the original bid to run trains between London, Manchester and Glasgow because of the miscalculations. Three officials are still suspended.

The inquiry into the collapsed tendering process was led by Centrica chief executive Sam Laidlaw.

His first report, last October, talked of officials not following their own guidelines, not treating the bidders equally, failing to include inflation in their figures and ignoring warnings of possible problems months before the deal capsized.

According to the BBC’s transport correspondent Richard Westcott, this latest, and final report by Mr Laidlaw will cast more light on why it all went wrong, but is unlikely to name names.

That has been left to another inquiry, which has been completed, but will not be made public.

Mr Laidlaw had been due to appear before the House of Commons Transport Select Committee this week, but he will now give his evidence on 18 December.

Also on Monday, Virgin confirmed it would be bidding again to run the West Coast Mainline in the long term. It also said it would like to bid for the East Coast Mainline, which is currently in public hands until December 2013.

The chief executive of Virgin Rail Group, Tony Collins, commenting on the extension of the company’s agreement to run the West Coast Mainline, promised “even better service”.

He said: “We are proud of what we have achieved since 1997, but there is undoubtedly more to come and we will work closely with the DfT to bring even better services in future.”

Michael Roberts, chief executive of the Association of Train Operating Companies, said passengers and the rail industry would now have clarity about the next two years on the West Coast line.

“Ministers and officials must now address the specific flaws that led to the cancellation of this competition and get the programme of franchising back on course,” he said.

The general secretary of the Rail, Maritime and Transport Workers union, Bob Crow, said there had been a “reckless high-wire act that has taken the negotiations between Virgin and the DfT right to the very brink”.

“Because of the shocking ineptitude right at the top of this rotten government, Sir Richard Branson has muscled his way into a monopoly provider position and him and his Virgin Trains shareholders will be laughing all the way to the bank.

“The case for renationalisation of Britain’s railways is now overwhelming.”

Source : BBC

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