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Virgin Trains and Stagecoach win £3.3bn contract to run the East Coast mainline rail franchise | Virgin Trains and Stagecoach win £3.3bn contract to run the East Coast mainline rail franchise |
(about 3 hours later) | |
Stagecoach and Virgin Trains are set to cash in on one of Britain’s most lucrative railway contracts after ministers awarded the £3.3 billion, eight-year East Coast mainline contract to their joint venture. | |
The Government staved off one political row by rejecting the favourite — a joint bid by Eurostar and Keolis, both majority-owned by France. | The Government staved off one political row by rejecting the favourite — a joint bid by Eurostar and Keolis, both majority-owned by France. |
But critics still condemned the move to re-privatisate the London-to-Scotland line by handing it to Stagecoach, led by Scottish tycoon Brian Souter, and Sir Richard Branson’s Virgin Trains. | But critics still condemned the move to re-privatisate the London-to-Scotland line by handing it to Stagecoach, led by Scottish tycoon Brian Souter, and Sir Richard Branson’s Virgin Trains. |
The East Coast mainline has generated £1 billion for UK taxpayers since 2009, when former operator National Express handed the contract back to the Government. | The East Coast mainline has generated £1 billion for UK taxpayers since 2009, when former operator National Express handed the contract back to the Government. |
The RMT union called returning the franchise to the private sector “a national disgrace”. | The RMT union called returning the franchise to the private sector “a national disgrace”. |
General secretary Mick Cash added: “This is pure industrial vandalism by a rotten government hell-bent on wrecking successful public services in the name of private greed.” | General secretary Mick Cash added: “This is pure industrial vandalism by a rotten government hell-bent on wrecking successful public services in the name of private greed.” |
Len McCluskey, general secretary of the Unite union, condemned the “nakedly political decision to rush through the reprivatisation of the East Coast line before the general election. | Len McCluskey, general secretary of the Unite union, condemned the “nakedly political decision to rush through the reprivatisation of the East Coast line before the general election. |
People will rightly ask why the Tory-led coalition thought it was okay for the French government to bid and run our railways, but not our own public sector who got the East Coast back on track.” | People will rightly ask why the Tory-led coalition thought it was okay for the French government to bid and run our railways, but not our own public sector who got the East Coast back on track.” |
The contract award is another major blow for FirstGroup, which was shortlisted for five franchises at the beginning of the year but has come away empty handed. | The contract award is another major blow for FirstGroup, which was shortlisted for five franchises at the beginning of the year but has come away empty handed. |
Shares in FirstGroup had already been hit by expectations it would lose out, and today rose 1.4p to 109.4p. Stagecoach shot up more than 7 per cent to 396.4p. Virgin Trains is 51 per cent-owned by Stagecoach, and Branson’s firm has a 49 per cent stake. | Shares in FirstGroup had already been hit by expectations it would lose out, and today rose 1.4p to 109.4p. Stagecoach shot up more than 7 per cent to 396.4p. Virgin Trains is 51 per cent-owned by Stagecoach, and Branson’s firm has a 49 per cent stake. |
The winning bidders have promised to invest £140 million in the route over eight years from next March, and pledge to pay the Government £3.3 billion for the contract. | The winning bidders have promised to invest £140 million in the route over eight years from next March, and pledge to pay the Government £3.3 billion for the contract. |
It plans 3100 extra seats for the morning peak by 2020 and journey times from London to Edinburgh reduced by 13 minutes. | It plans 3100 extra seats for the morning peak by 2020 and journey times from London to Edinburgh reduced by 13 minutes. |
Transport Secretary Patrick McLoughlin claimed he had secured “a fantastic deal for passengers and for staff on this vital route”. | Transport Secretary Patrick McLoughlin claimed he had secured “a fantastic deal for passengers and for staff on this vital route”. |
But critics pointed out today’s decision means Stagecoach and Virgin control all of the train journeys between London and Scotland — apart from Serco’s sleeper service — as Stagecoach and Virgin have been running the West Coast mainline between the two countries since 1997. | But critics pointed out today’s decision means Stagecoach and Virgin control all of the train journeys between London and Scotland — apart from Serco’s sleeper service — as Stagecoach and Virgin have been running the West Coast mainline between the two countries since 1997. |