Tuesday, 28 August 2012

Court Proceedings over West Coast Franchise


Stagecoach have issued the following announcement on their website today

InterCity West Coast rail franchise

Stagecoach Group plc notes that its joint venture, Virgin Rail Group, has today
commenced Court proceedings seeking a review of the decision by the Department
for Transport to award the new InterCity West Coast rail franchise to a
subsidiary of FirstGroup plc.

Also the following information has been posted on the BBC News website.

Virgin Trains has said it has started court proceedings over the government's decision to award a new franchise to transport company FirstGroup.
Virgin had run the West Coast Main Line since 1997, but lost to FirstGroup, prompting it to demand a review.
Labour had also urged the government to delay the signing of the contract so that MPs could examine it.
But earlier Transport Secretary Justine Greening said there would be no delay in signing the FirstGroup deal.
She had been expected to sign the contract on 29 August, but Virgin is now hoping that its legal challenge will delay the signing.
'Substantial risks' In a statement, Virgin Trains said it had tried to get clarity over the Department for Transport's decision, but its questions had been unanswered for three weeks.
"We are left with no choice but to commence court proceedings as we believe the procurement process has ignored the substantial risks to taxpayers and customers of delivering FirstGroup's bid over the course of the franchise.
"In addition, it has ignored the DfT's own assessment that VTL's [Virgin Trains Limited] bid was more deliverable and a lower risk. We question whether FirstGroup's bid has been correctly risk-adjusted by the department given all of its supposed incremental value is delivered after 2022.
"The current process is geared to selecting the highest-risk bid and needs to be independently audited to prevent a repeat of former franchise failures," a statement said.
Sir Richard Branson, the founder of the Virgin Group, said the decision had not been taken lightly.
"We had hoped that Parliament or an external review would be able to scrutinise this badly flawed process before the franchise was signed.
"However, that opportunity would be denied if the DfT follows through with its determination to rush through the process before Parliament returns next week.
"That ignores the wishes of more than 150,000 people who signed the Downing St e-petition in 10 days, the Labour Opposition, two important Commons committees and many backbench Conservative MPs who wanted a debate before the decision is taken, not a post-mortem afterwards," he said.

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