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Government seeks Virgin franchise extension

The Department for Transport announced yesterday that it intends to negotiate a temporary extension of Virgin Rail’s franchise to run services on the West Coast Main Line.

On 3 October the competition to run trains on this line was cancelled after the government said it had discovered significant technical flaws in the way the franchise process was conducted.

The current franchise is due to expire on 9 December after which it is the government’s intention that Virgin remains as operator for a short period – expected to be between nine and 13 months – while a competition is run for an interim franchise agreement.

This interim agreement, which would be open to any bidders, will then run until the new long term West Coast franchise is ready to commence.

Franchise fiasco

The department has paused the on-going franchise programme including live competitions on Essex Thameside, Great Western and Thameslink and set up two independent reviews into what went wrong with the West Coast competition and the wider Department fof Transport rail franchise programme.

The first will be an urgent independent examination into the lessons to be learned from the department’s handling of West Coast competition. Conducted by independent advisers and overseen by Centrica chief executive Sam Laidlaw and former PricewaterhouseCoopers strategy chairman Ed Smith, both DfT non-executive directors, this review will look as soon as possible at what happened and why with a view to delivering an initial report by the end of October.

The second independent review will be undertaken by Eurostar chairman Richard Brown CBE, and examine the wider rail franchising programme. It will look in detail at whether changes are needed to the way risk is assessed and to the bidding and evaluation processes, and at how to get the other franchise competitions back on track as soon as possible. This will report back by the end of December.

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