Britain has torn up a deal awarding one of its biggest rail franchises to a private operator in a humiliating U-turn that raises doubts about the government’s handling of the privatised railways.
Ministers froze three more rail franchise competitions yesterday after the Department for Transport said that “completely unacceptable” flaws had been uncovered in its handling of bids to run the West Coast Main Line, a jewel in the crown of the rail network linking London and Scotland.
The debacle is damaging for the ruling Conservative Party, which began its programme of rail privatisations in the 1990s. The project has been dogged by fatal accidents, financial crises and political infighting.
Virgin Trains, a venture between Richard Branson’s Virgin Group and Stagecoach, has run the West Coast service since 1997 and offered £4.8 billion to continue doing so.
The company mounted a legal challenge after FirstGroup was awarded the contract. Virgin claimed that the winning bid would have bankrupted the company. – (Reuters)