Virgin Trains loses West Coast Mainline franchise

[GommeInc]

Why is the state in the business of granting rail contracts? so much for 'privatisation'.

It's one of those lovely moments where the Government are all for privatisation but they hold on to the land and rail lines. Virgin/FirstGroup have the trains but the Government owns the tracks, or at least they think they do. It doesn't make any sense why Virgin lost the deal as they clearly had the determination to deliver.

I guess time will tell how well FirstGroup take the challenge. FirstGroup is alright in the Southeast, they run the trains on HS1 (the High-Speed train to London from Kent). They used to run the trains from Essex to London too but they lost that to a Dutch company called Greater Anglia. They were alright before that. They seem a bit distant from the passengers who use their trains though, ever since they hired the American CEO which sort of ruins the point they make that they're a British company (but Stock Exchange listing only)

[xxMATTGxx]

Are we on about before privatisation when it used to be called British Rail? Because it wasn't exactly any better back then.

[GommeInc]

It's more the fact that privatisation was meant to improve the services beyond when it was nationalised and reduce public spending, and privatisation usually means there is little to no Government intervention. You'd think Virgin would still have the franchise, yet the Government seems to have control of who runs on what lines despite a decent track record (excuse the pun). It's sort of quasi-privatisation. The public still own the lines yet the lines are used by private companies. It can be quite wasteful on both sides. It's probably why fares are a bit dodgy. Either have it nationalised or privatised, never somewhere inbetween.

[xxMATTGxx]

It's more the fact that privatisation was meant to improve the services beyond when it was nationalised and reduce public spending, and privatisation usually means there is little to no Government intervention. You'd think Virgin would still have the franchise, yet the Government seems to have control of who runs on what lines despite a decent track record (excuse the pun). It's sort of quasi-privatisation. The public still own the lines yet the lines are used by private companies. It can be quite wasteful on both sides. It's probably why fares are a bit dodgy. Either have it nationalised or privatised, never somewhere inbetween.

Yeah I would rather have Virgin still run the WCML for sure - The government seems to have gone to the company that has put a higher bid in. Although I know it's always about money but the whole GNER/National Express showed how well that can go and probably why Virgin is pretty annoyed at the decision. We can only see what will happen with First running it - Maybe they will do well or maybe they will go downhill.

Although I think this might be correct: I think First may of mentioned about reducing staff? Where as Virgin said they bidded this amount of money so that they could keep all of their current staff.

Maybe I am just a fan of the Virgin brand but when you have 91% customer ssatisfaction in 2012 - Do things really need to change?

[GommeInc]

Yeah I would rather have Virgin still run the WCML for sure - The government seems to have gone to the company that has put a higher bid in. Although I know it's always about money but the whole GNER/National Express showed how well that can go and probably why Virgin is pretty annoyed at the decision. We can only see what will happen with First running it - Maybe they will do well or maybe they will go downhill.

Although I think this might be correct: I think First may of mentioned about reducing staff? Where as Virgin said they bidded this amount of money so that they could keep all of their current staff.

Maybe I am just a fan of the Virgin brand but when you have 91% customer ssatisfaction in 2012 - Do things really need to change?

Indeed, it's what I'm failing to understand - they have a good customer satisfaction so why there needed to be change doesn't make sense. The highest bidder doesn't necessarily mean better for the customers, and as you noted - there are talks of reducing the workforce which, from a report by the BBC, was something Virgin pledged wouldn't happen if they kept the contract.

Bizarre, but I guess we have to see what FirstGroup bring to the table :/ Isn't it Virgin's only train franchise?

[xxMATTGxx]

@GommeInc;

Yeah it is - Virgin being on the railway is now in doubt as they don't want to bid for other franchises because it costs so much money. They bidded for the ECML before as well but they went to companies that had to be helped by the government. (GNER, National Express)

Those bids were also quite high and this is why Virgin are unhappy because another high bid as took place and there is risks of doing that such as not being able to pay, jobs losses etc.

[GommeInc]

Hmm, strange. It's not like FirstGroup/National Express are in that much trouble. You would think the Government would support Virgin rather than support their competition because it was their main/only franchise. It seems a bit anti-competitive of the Government. It makes you wonder what Greater Anglia (owned by Abellio) did to secure the Greater Anglia franchise from National Express.

Virgin could just wait and see what happens. If FirstGroup fail, they could try and replace them as the operator

[xxMATTGxx]

Hmm, strange. It's not like FirstGroup/National Express are in that much trouble. You would think the Government would support Virgin rather than support their competition because it was their main/only franchise. It seems a bit anti-competitive of the Government. It makes you wonder what Greater Anglia (owned by Abellio) did to secure the Greater Anglia franchise from National Express.

Virgin could just wait and see what happens. If FirstGroup fail, they could try and replace them as the operator

National Express as in the coach company aren't in trouble I don't think? The problem is when they took over the ECML some years after a big mess came up and the government had to take it back off them and make it into a public ownership while it was all going on.

East Coast is a trading name of East Coast Main Line Company Ltd (ECMLCo), a subsidiary of Directly Operated Railways Limited, formed by the Department for Transport as an operator of last resort when National Express refused further financial support to its National Express East Coast (NXEC) subsidiary and consequently lost its franchise.

Directly Operated Railways is actually owned by the Department for Transport meaning it's currently ran by the public I assume. This is what Virgin was getting at because they basically failed and it was all down to a high bid.

The Department for Transport (DfT) handed the contract to FirstGroup after Virgin's rival made an offer of £5.5bn to run the line for the next 13 years - £423m a year. Sir Richard tweeted that he had bid £750m less.

In his blog, Sir Richard voiced fears that the amount FirstGroup paid will make the contract unprofitable, forcing the Government to take back ownership of the line. This is what happened with the East Coast Main line, when first GNER (in 2007) and then National Express (in 2009) were stripped of the contract after they could not afford to pay the Government £1.3bn for the right to run the service.

[GommeInc]

They're not now, but their train franchise is virtually non-existent these days. I remember the issues the Greater Anglia line had (which is part of the ECML)

All Virgin can hope is that FirstGroup mess up so they can take over the reins. It seems the Government just wanted the higher bidder just for the money, rather than ensure people keep their jobs or have a service they know is decent and one with which they are familiar with. Story of their life if you're against the cuts

[Neversoft]

Petition - http://epetitions.direct.gov.uk/petitions/37180