The government is set to complete the deal to transfer the West Coast rail line from Virgin Trains to First Group tomorrow, despite calls for MPs to examine the contract first.
Transport Secretary Justine Greening said today that the agreement would go ahead. The Department for Transport told Public Finance it could be confirmed at any point from midnight tonight.
Last week, Louise Ellman, chair of the Commons transport select committee, urged Greening to delay the deal so the committee could examine it once Parliament returns from recess.
Ellman said the government’s decision to award the West Coast rail franchise to First had ‘raised a number of concerns’. First promised to pay the government £5.5bn over 15 years to run the line between London and Glasgow. Losing bidder Virgin Trains, which bid around £700m less, has questioned the viability of the winning bid.
Greening is set to give evidence to the committee on September 12, and Ellman called on the department to hold off signing the contract before this.
‘I want the transport committee to have the opportunity to explore these issues and will be consulting my colleagues shortly. I have therefore written to Justine Greening… asking her to delay signing the final contract papers.’
She said MPs should scrutinise the deal as there was ‘a great deal’ of public money at stake.
‘I have no fixed view on the matter and no preference for any of the bidders,’ she added. ‘My wish is simply to bring greater transparency to the process.’
Virgin Trains, which has run the line since privatisation, has warned that First had made a ‘very, very aggressive bid’.
Virgin founder Sir Richard Branson said the award was ‘a risk’. He cited the examples of GNER and National Express, ‘who overbid on the East Coast mainline’ and had to return their franchises early, in 2007 and 2009 respectively, because they were unable to meet their payments.
However, speaking to the BBC this morning, Greening said that the deal would go ahead following what she called ‘a proper process’. First’s bid is ‘deliverable’, she added.
‘We have to take the bid that’s the best value for taxpayers,’ she said.
‘If we’re going to move off plus-inflation rail fare rises we have got to start getting more value out of particularly lucrative franchises, like West Coast mainline, and that’s exactly what we’re doing.’
Once the deal is signed, First will take over the running of the West Coast line from December 10.
