News Virgin loses West Coast franchise to FirstGroup by Katie Silvester
FirstGroup is to take over the West Coast franchise from December 2012,
having pipped Virgin Trains to the post in a franchise competition.
First will pay £5.5bn in premiums over the lifetime of the contract, which will last for up to 15 years, relying on ticket revenues rising by 10 per cent annually in order to fund the payments.
The deal will see First introduce new electric trains, in addition to the 106 new Pendolino cars already on order, and cut the cost of its Standard Anytime fares by an average of 15 per cent. Rail minister Theresa Villiers said: ‘This new franchise will deliver big improvements for passengers, with more seats and plans for more services. Targets to meet on passenger satisfaction will be introduced for the first time in an InterCity rail franchise and passengers will also benefit from smart ticketing and from investment in stations. ‘The West Coast is the first of the new
longer franchises to be let by the coalition, which has helped us secure real benefits for passengers by encouraging First West Coast Limited to invest in the future of the service.’ But Virgin Trains – a joint venture between Stagecoach and the Virgin Group – was unhappy about the failure of its ‘strong and deliverable bid’, which now sees it with no franchises at all.
Sir Richard Branson, founder of Virgin Group, believes that First has overbid for the franchise and may not be able to deliver its £5.5bn of premiums. He thinks its projections of 10 per cent growth annually are not realistic.
‘The government decision to award
the West Coast Main Line Franchise to FirstGroup is extremely disappointing for Virgin, and for our staff that have worked so hard to transform this railway over the last 15 years,’ he said. ‘We submitted a strong and deliverable bid based on improving customers’ experience, increased investment and sustained innovation. To have bid more would have involved dramatic cuts to customer quality and considerable fare rises which we were unwilling to entertain. ‘We also did not want to risk letting everybody down with almost certain bankruptcy at some time during the franchise as happened to GNER and National Express who overbid on the East Coast mainline. Sadly the government has chosen to take that risk with FirstGroup and we only hope they will continue to drive dramatic improvements on this line for years to come without letting everybody down.’
Branson, who said that
Virgin was unlikely to bid for UK rail franchises again, called the practice of giving franchises to the highest bidder, whether
Railway Children appeals for volunteers
The charity Railway Children is recruiting volunteers to assist at events and opportunities related to the railways. The Railway Children Rail Network aims to raise vital funds and awareness for the charity. Railway Children fights for children living alone and at risk on the streets, so volunteers are crucial in helping them to support many vulnerable children and young people in the UK, India and East Africa. Former Manchester councillor Keith
Whitmore has recently been elected as honorary alderman of Manchester City
Council for long service and is responsible for co-ordinating volunteers on behalf of the network. He is a keen railway enthusiast. Whitmore said: ‘I am very much looking forward to taking on this important role. It combines my interest both in railways and in making life more tolerable for vulnerable youngsters who need help. I will be looking for more volunteers – especially from the heritage railway movement – to support this important work, attending events to fundraise for this special railway charity.’
If you are interested in joining the group
or not the premiums promised were deliverable, ‘insanity’.
The RMT union said that FirstGroup had based its bid on ‘the same kind of over- geared financial projections that lead to the collapse of the GNER and National Express contracts on the East Coast – forcing the government to renationalise the service’. The franchise contract includes substantial financial penalties that First would incur if it was unable to meet its premium payments. The transport group has had to put up £10m of shareholder capital, a £45m performance bond agreement and a subordinated loan of £190m. On top of that, it has had to provide a season ticket bond of £5m and a £15m parent company guarantee to ensure that its contractual station facilities maintenance obligations are met.
The company that First has formed to run the operation is called First West Coast Ltd, but it is expected that a new brand name will be introduced when the franchise begins. • See comment, page 4
COMPLY SERVE PARTNERS WITH FORGETRACK
Forgetrack, a project management training provider for the rail industry, has signed a partnership agreement with Comply Serve to sell its flagship e-collaborative, Cloud- based project compliance software, ComplyPro. Chris Loxley-Ford, director of Forgetrack, said: ‘We were actively looking for open, standards-based, value-added solutions that enhanced our current offerings, and ComplyPro is an ideal fit.’
and volunteering your time, please email Keith Whitmore at: k.whitmore@railwaychildren.
org.uk For more information on Railway Children visit:
www.railwaychildren.org.uk
SEPTEMBER 2012 Page 7
AJP/
Shutterstock.com
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60