The competition to run trains on the West Coast Main Line has been cancelled following the discovery of significant technical flaws in the way the franchise process was conducted, Transport Secretary Patrick McLoughlin has announced.
The decision means the Department for Transport (DfT) will no longer be awarding a franchise contract to run the West Coast service when the current franchise expires in December.
FirstGroup was due to take over the running of the London to Scotland line after being awarded the contract by the DfT in August, but Virgin Rail, which currently runs the service, launched a High Court challenge against the decision
The new contract for the West Coast main line franchise could be signed today. The Government has awarded the contract to FirstGroup after it bid more than £1 billion more than Virgin Trains.
However, the outgoing company is trying to bring about a last minute change of heart, with its boss, Sir Richard Branson, offering to run the service for free while it is scrutinised by Parliament.
Opposition MPs are calling for a debate at Westminster, which returns from its recess next week.
Despite the calls, a spokesman for the Department for Transport indicated that the agreement was set to be signed today saying, "The winning bidder was decided by a fair and established process and no reason has been advanced to convince DfT not to sign the agreement."
Unions, politicians and many rail passengers are calling on the Government to delay the signing of a new franchise for the West Coast main line. Virgin Trains is due to lose the service after FirstGroup made a bid that was more than a billion pounds higher.
Thousands of people have signed a petition opposing the move, but FirstGroup insists its service will provide the best deal for taxpayers and passengers.
RMT leaders have said that First Group have based their 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.
Speaking to ITV Border, RMT Leader, Craig Johnston said he believes the contract will be signed in the coming days without a delay. He said members of the RMT union have expressed concern at the decision.
First Group have responded to calls for a delay to the signing of contracts on the West Coast Main Line rail franchise after more than 100,000 people signed a petition for the decision to be reviewed in Parliament.
First Group Statement:
"We are pleased that the DfT has reiterated that our winning bid was selected by a fair, rigorous process that scrutinised best value and deliverability and that they concluded that no reason has been advanced to convince the DfT not to sign the agreement.
Our bid is deliverable and it provides the best deal for taxpayers, for passengers and for staff on the West Coast Mainline. We will be introducing major service improvements, new trains and cutting standard anytime fares by 15% and by 2016 there will be 40,000 more seats.
We will also provide the taxpayer with a fair and appropriate return for the £9bn of their money that has been spent modernising the line. We are one of the country’s most experienced rail operators and have a good track record.
We won the bid fair and square and we are pleased that the Department for Transport sees no reason to revisit the process."
Statement by Tim O'Toole, Chief Executive of FirstGroup.
Unions, politicians and many rail passengers are calling on the Government to delay the signing of a new franchise for the West Coast Main Line.
Virgin Trains is due to lose the service, which passes through South West Scotland and Cumbria, after First Group made a higher bid.
Labour wants the issue debated in Parliament. 140,000 people have signed a petition opposing the move.
First Group says its bid is deliverable and provides the best deal for taxpayers. It says it was selected in a fair, rigorous process that scrutinised best value and deliverability. It adds that it will be introducing major service improvements, new trains and will cut standard fares.
Shadow Secretary of State for Transport, Maria Eagle MP says the decision should be discussed in Parliament.
A south Lakes MP is calling for a Parliamentary debate on the future of the West Coast main line railway and any future franchise award.
The new franchise will run for 14 years until introduction of the first phase of the high speed rail line in 2026.
Westmorland and Lonsdale MP Tim Farron says he wants a debate to ensure prices are not increased while services reduced.
He said: "I am prepared to back the bidder who offers the best deal for our area.
"I am calling for a parliamentary debate on the matter so we can make sure local residents are heard loudly and clearly in Westminster."