The Department for Transport has announced that Virgin Trains will continue to operate on the West Coast Main Line for another 23 months.
The government entered into negotiations with Virgin Trains on 15 October following the cancellation of the InterCity West Coast Franchise competition.
The announcement coincides with the completion of a project to deliver 106 Pendolino carriages to the West Coast Main Line, introduced with £1.5bn of government support.
The new carriages will increase daily capacity by up to 28,000 seats.
The new agreement will also introduce a new hourly service between London and Glasgow.
The independent inquiry into the cancellation of the West Coast Main Line franchise competition reported today. It said the project failed because of an accumulation of significant errors related to inadequate planning and preparation, complex organisational structure, and a weak governance framework.
- DfT used flawed and inconsistent methodology when guiding bidders on the amount of risk capital (known as the Subordinated Loan Facility) they would need to offer to guarantee their franchise against default
- The Subordinated Loan Facility figures resulting from the flawed methodology were then varied in a way that contravened franchise competition rules
- Ministers made the original August 14 provisional contract award without being told about the critical flaws and having been given “inaccurate reports”
But the Laidlaw Inquiry also said:
- The report’s recommendations to strengthen accountability and governance structures “if acted upon quickly and effectively, will help to restore confidence in the DfT’s ability to conduct effective rail franchising and procurement”
- While there were inconsistencies in the way First Group and Virgin Trains were treated during the franchise process, the report finds that there is no evidence of a culture of bias against Virgin at the DfT
- There is nothing in the report to suggest that the flaws discovered in this franchise competition exist in any other DfT procurements