Virgin Trains Under 'Constant Review' After East Coast Collapse

Photo by Lord Baileys/iStock/Getty Images Plus/Getty Images

by Bradley Gerrard, The Telegraph, April 23, 2018

Pressure is mounting on Virgin Trains after the Government said it was keeping the company’s future in rail under “constant review”.

Sir Richard Branson’s train company stoked political controversy last year when it emerged its joint venture which runs the East Coast mainline with Stagecoach would have to hand the keys to the franchise back years early.

FREE Virtual Event

Pivoting Back to Travel: Phase 4

Are you prepared to guide your clients through the “new normal” of travel? Join us December 15, 2020 from 1pm-2:20pm EST for Pivoting Back to Travel: Phase 4. The upcoming installment of our FREE virtual series will feature presentations from the Cayman Islands, Dominican Republic, and Seabourn on their most up-to-date travel procedures, health & safety protocols they’ve implemented to keep guests safe, activities that are open to visitors, what your clients need to know while on their trip and more! Visit www.pivotingbacktotravel to view the full agenda and register for your FREE pass.

The pair were accused of overbidding for the franchise by Chris Grayling, the Transport Secretary, while the companies blamed macroeconomic factors and uncompleted Network Rail upgrades for preventing the joint venture from hitting its targets. 

The companies have also reiterated that they have met the financial obligations of the contract, including using all of a £165m parent company bond, put in place at the start of the franchise to ensure the Government receives its payments if a rail operator is struggling.

But transport minister Jo Johnson has responded to a written question from Andy McDonald, the shadow transport secretary, stating his department is “keeping Virgin’s eligibility for current and future bids under close scrutiny and constant review”.

The comments come just a couple of months after Mr Grayling extended Virgin Trains’ contract on the West Coast mainline through to 2019. 

The Secretary of State defended the decision by stating Virgin was the majority shareholder on the West Coast line, unlike the East Coast which is 90pc controlled by Stagecoach.

Any rebuke of Virgin Trains by the Government seems unlikely to involve removing its ability to bid for future rail franchises though. 

Labour manifesto policy | Rail

Mr Grayling has said there are “no adequate legal grounds” to restrict either company from bidding for future rail contracts.

Mr McDonald said: “Labour believes franchise failure must mean forfeit so it is good that the Government is reviewing the company’s right to bid for rail franchises. There must be no reward for failure.”

Virgin Trains declined to comment.

 

This article was written by Bradley Gerrard from The Telegraph and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to [email protected].

Related Stories

France Air, Rail Strike to Continue Through Tuesday

Eurostar Launches High-Speed Rail From London to Rotterdam, Amsterdam

On Board the Railway Staffed Entirely by Children

Vacations By Rail Raises Travel Agent Commissions

Suggested Articles:

Thailand announced a new tourist visa for U.S. travelers to apply in advance to visit safely for up to 60 days. Here's what you need to know.

Accor is taking full ownership of sbe’s hotel asset light business and entered an all-share merger with Ennismore. Here's what it means.

After cruising successfully in Europe the past few months, MSC Cruises is the first major line to receive approval for cruises from Japan. Read more.