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| East coast rail privatisation ignores franchise failures, say critics | East coast rail privatisation ignores franchise failures, say critics |
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| The government has been accused of ignoring the lessons of recent rail franchise failures by returning the London-Edinburgh route to the private sector after a prolonged spell of state ownership. | The government has been accused of ignoring the lessons of recent rail franchise failures by returning the London-Edinburgh route to the private sector after a prolonged spell of state ownership. |
| East Coast will be in private hands by 2015 under rail franchise plans announced by the Department for Transport, which had taken control of the route in 2009 when its previous owner, National Express, handed back the keys. | East Coast will be in private hands by 2015 under rail franchise plans announced by the Department for Transport, which had taken control of the route in 2009 when its previous owner, National Express, handed back the keys. |
| State ownership of the franchise has been heralded as a success and Directly Operated Railways (DOR) has paid more than £600m in premiums and profits into government coffers in the three years to April 2012. The move comes as ministers seek an end to the franchising logjam created by the west coast fiasco, which saw Virgin Trains stripped of the contract and then reinstated after the government admitted serious flaws in the bidding process. | State ownership of the franchise has been heralded as a success and Directly Operated Railways (DOR) has paid more than £600m in premiums and profits into government coffers in the three years to April 2012. The move comes as ministers seek an end to the franchising logjam created by the west coast fiasco, which saw Virgin Trains stripped of the contract and then reinstated after the government admitted serious flaws in the bidding process. |
| The transport secretary, Patrick McLoughlin, launched a bidding competition for East Coast on Tuesday with an expected start of service by the new operator in February 2015. | The transport secretary, Patrick McLoughlin, launched a bidding competition for East Coast on Tuesday with an expected start of service by the new operator in February 2015. |
| The general secretary of the Trades Union Congress, Frances O'Grady, said: "This decision defies all logic. Since returning to public ownership, the east coast mainline has flourished, with passenger numbers and customer satisfaction increasing and all profits re-invested back into improving the service." | The general secretary of the Trades Union Congress, Frances O'Grady, said: "This decision defies all logic. Since returning to public ownership, the east coast mainline has flourished, with passenger numbers and customer satisfaction increasing and all profits re-invested back into improving the service." |
| The largest rail union, the RMT, noted that the government had been forced to step in on two separate occasions after National Express quit the service, only three years after previous incumbent GNER had reneged on its contract. "The proposed reprivatisation of East Coast, after the public sector rescued the service following two private failures, proves conclusively that the political class have learned absolutely nothing when it comes to our railways," said Bob Crow, RMT general secretary. "This is a politically inspired wrecking move designed to flog off this publicly-owned intercity route before the next election regardless of the consequences." | The largest rail union, the RMT, noted that the government had been forced to step in on two separate occasions after National Express quit the service, only three years after previous incumbent GNER had reneged on its contract. "The proposed reprivatisation of East Coast, after the public sector rescued the service following two private failures, proves conclusively that the political class have learned absolutely nothing when it comes to our railways," said Bob Crow, RMT general secretary. "This is a politically inspired wrecking move designed to flog off this publicly-owned intercity route before the next election regardless of the consequences." |
| Labour too was quick to criticise the timing of the announcement. Shadow transport secretary Maria Eagle said: "With the government's rail franchising programme in chaos, it is a bizarre and dogmatic decision to prioritise the privatisation of a service that is actually on track. It's clear that the government has learned nothing from the franchising fiasco that could eventually see more than £100m of taxpayers' money go down the drain as a result of ministerial incompetence." | Labour too was quick to criticise the timing of the announcement. Shadow transport secretary Maria Eagle said: "With the government's rail franchising programme in chaos, it is a bizarre and dogmatic decision to prioritise the privatisation of a service that is actually on track. It's clear that the government has learned nothing from the franchising fiasco that could eventually see more than £100m of taxpayers' money go down the drain as a result of ministerial incompetence." |
| The decision to accelerate the return of one of Britain's most prestigious rail routes to the private sector could spark another contest between Virgin Trains and FirstGroup, which competed for the west coast franchise last year. | The decision to accelerate the return of one of Britain's most prestigious rail routes to the private sector could spark another contest between Virgin Trains and FirstGroup, which competed for the west coast franchise last year. |
| That head-to-head contest ended in victory for Virgin Trains after it successfully challenged the government's decision to award the contract to FirstGroup, forcing the DfT to suspend its entire franchising programme. | That head-to-head contest ended in victory for Virgin Trains after it successfully challenged the government's decision to award the contract to FirstGroup, forcing the DfT to suspend its entire franchising programme. |
| As part of the east coast announcement, the government also published a detailed timetable for all rail franchise arrangements over the next eight years, which had been put on hold in the wake of the west coast mainline fiasco. It includes a further extension for Virgin Trains on the west coast route which will see the operator continue on the London-Glasgow line until April 2017. | As part of the east coast announcement, the government also published a detailed timetable for all rail franchise arrangements over the next eight years, which had been put on hold in the wake of the west coast mainline fiasco. It includes a further extension for Virgin Trains on the west coast route which will see the operator continue on the London-Glasgow line until April 2017. |
| McLoughlin said: "This programme is a major step in delivering tangible improvements to services, providing long-term certainty to the market and supporting our huge programme of rail investment. Above all, in future franchise competitions we are placing passengers in the driving seat by ensuring that their views and satisfaction levels are taken into account when deciding which companies run our railway services." | McLoughlin said: "This programme is a major step in delivering tangible improvements to services, providing long-term certainty to the market and supporting our huge programme of rail investment. Above all, in future franchise competitions we are placing passengers in the driving seat by ensuring that their views and satisfaction levels are taken into account when deciding which companies run our railway services." |
| Business lobby groups welcomed the move. Rhian Kelly, director of business environment at the CBI, said: "It is right that ministers are getting a grip on the franchise system. A firm timetable and more robust procurement process are vital to rebuilding public, taxpayer and business confidence. It would be hard for franchising to survive another high-profile failure. The rail industry cannot afford further uncertainty which risks long-term damage to firms across the supply chain and cuts in rolling stock orders." | Business lobby groups welcomed the move. Rhian Kelly, director of business environment at the CBI, said: "It is right that ministers are getting a grip on the franchise system. A firm timetable and more robust procurement process are vital to rebuilding public, taxpayer and business confidence. It would be hard for franchising to survive another high-profile failure. The rail industry cannot afford further uncertainty which risks long-term damage to firms across the supply chain and cuts in rolling stock orders." |
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