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Branson is upset at rail bid process
15-Aug-2012The loss of the West Coast Main Line to FirstGroup is not making him a happy man.
"Insane" government bidding process was Branson's comment. Virgin ran the franchise since 1997 and in that time doubled annual passenger numbers. As of this week the new 13 year deal was awarded to FirstGroup.
The deal will see over five billion paid in premiums by FirstGroup to the Government over the life of the contract. The Rail Minister Theresa Villiers stated "big improvements for passengers with more seats and plans for more services" as a factor in the success of the bid and FirstGroup chief executive Tim O'Toole they would be making "significant improvements, including reduced journey times, and introducing new direct services".
Sir Richard added strongly that he was "extremely disappointed" with the decision made by the Department for Transport and explained "Based on the current flawed system, it is extremely unlikely that we would bid again for a franchise."
He noted that other rail line bids have cost other firms like GNER and East Cost Main Line to over bid and as a result both customers and employees have suffered in the long term.
Sir Richard reflected that this was now the fourth time his business had been outbid in a franchise tender process and said "On the past three occasions, the winning operator has come nowhere close to delivering their promised plans and revenue, and has let the public and country down dramatically."
He also pointed out that "Insanity is doing the same thing over and over again and expecting different results. When will the Department for Transport learn?"
Labour's shadow transport secretary Maria Eagle believes that rail travellers will "lose out" and the government must "reassure taxpayers that they have not been swayed by an unrealistic bid that does not in the end deliver the payments that have been promised".
With the RMT transport union also commenting that awarded bid was "a total con from top to bottom" and will definitely lead to "massive cuts to jobs and services and huge increases in fares".
Passenger Focus; the consumer watchdog added that the important thing for rail travellers is value for money "not the name on the side of the train".
There are many interested parties all with a view on this award but after the recent announcements of more (above inflation) fair increases coming, its not looking good for the rail passenger coming in or out of London.
Author: Gary Marshall