Current operator Virgin Trains Stations called at 44 | Main Route(s) West Coast Main Line Stations operated 17 | |
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Franchise dates 9 March 1997 - April 2019 Website dft.gov.uk/intercity-west-coast | ||
InterCity West Coast is a railway franchise for passenger trains on the West Coast Main Line in the United Kingdom between London Euston, the West Midlands, North Wales, Manchester, Chester, Liverpool, Preston, Edinburgh and Glasgow. It was formed during the privatisation of British Rail and transferred to the private sector on 9 March 1997 when Virgin Trains, the current and only franchise-holder to date, commenced operations.
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The franchise was due to be re-let in December 2012, with FirstGroup announced as the winning bidder, a decision later reversed after the discovery of irregularities in the franchise letting process. In December 2012, Virgin Trains was awarded a management contract to run the franchise until November 2014. In March 2013, Virgin was awarded a further extension until 31 March 2017, and in 2016 this was again extended to April 2019.
The franchise is due to be replaced by a new one named West Coast Partnership on 1 April 2019, which will include High Speed 2 operations once services begin on the line in 2026.
1997 franchise
The initial franchise was contested by Sea Containers, Stagecoach and Virgin Rail Group. Each submitted two bids, one based on an all tilting train fleet, and another based on a combination of conventional and tilting trains. On 19 February 1997, the Director of Passenger Rail Franchising awarded a 15-year franchise to Virgin Rail Group, with Virgin Trains commencing operations on 9 March 1997.
In order for tilting trains to be operated, Railtrack was committed to upgrade the West Coast Main Line to allow 140 mph operation by 2005. In the wake of the collapse of Railtrack and the inability of successor Network Rail to deliver on the upgrade, the franchise was suspended in favour of a management contracts in July 2002. Due to costs having blown out from £2.5 billion to £10 billion there were cutbacks to the upgrade and the top speed reduced to 125 mph.
2012 franchise process
During 2011/12 the Department for Transport conducted a franchise competition, announced a winner, then cancelled the competition and refunded the costs of bids before any contracts were signed.
Bidding competition
With the franchise awarded in 1997 scheduled to end on 31 March 2012, the Department for Transport started the refranchising process in January 2011 by inviting expressions of interest in the Official Journal of the European Union for a franchise from 1 April 2012 for 14 years to March 2026. The award of the franchise was stated to be based on the "most economically advantageous tender in terms of the criteria as stated in the specifications". The franchise was the first to be offered under a new scheme rather than the previous "Cap and Collar" system, which provided for risk-sharing with government regarding future demand. The new scheme is intended to provide greater incentives for cost reduction by operators. Because of the increased future risks carried by operators under the new scheme, the government requires a large financial surety to discourage early contract default.
In March 2011, the Department for Transport shortlisted Abellio, FirstGroup, Keolis/SNCF and Virgin Rail Group to bid for the franchise, which would run for up to 15 years. In May 2011, a Draft Invitation to Tender was issued to the shortlisted bidders, which stated the franchise start date had been postponed until 9 December 2012. In October 2011, the Department for Transport announced that Virgin had been granted a franchise extension until 8 December 2012. In January 2012, the Department for Transport issued the Final Invitation to Tender to the shortlisted bidders. On 15 August 2012, the Department for Transport announced FirstGroup as the successful bidder for the franchise, promising 11 new six-carriage electric trains, direct services to Blackpool in 2013, and to Telford, Shrewsbury and Bolton in 2016.
Challenge
On 10 August 2012 a report commissioned by Virgin Rail Group, detailing problems with the franchising evaluation process, was handed to the Department for Transport.
An e-petition was created to urge the government to reconsider its decision and to debate the bids in the House of Commons. The petition was set up independently, but backed by Virgin, and attracted large support, gaining 50,000 signatures within two days. The 100,000 signatures required for the petition to be considered for debate in Parliament was exceeded. The matter was debated in the House of Commons on 17 September 2012.
Following the public's response to Virgin's loss of the franchise, Louise Ellman, Chair of the Transport Select Committee, wrote to the then Secretary of State for Transport, Justine Greening, asking her to delay the signing of the new contract until the committee have had a chance to explore the matter. Virgin had offered to run the line on a 'not for profit' basis while this takes place. Despite both public and political pressure for an independent review of the deal, the Department for Transport declared it would not delay the signing of the contract once the ten-day standstill period had expired. On 28 August 2012 Virgin Trains announced it would seek a judicial review of the franchise decision, preventing the contract being signed, claiming civil servants had "got their maths wrong with FirstGroup". The Department for Transport responded stating that they were confident the selection process was robust. In September 2012, the Department for Transport began making arrangements for the franchise to pass temporarily to West Coast Main Line Limited, a subsidiary of Directly Operated Railways, had a judicial review been granted.
Cancellation
On 3 October 2012, the government announced it was cancelling the franchise competition after discovering significant technical flaws in the bidding process, cancelling the decision to award it to FirstGroup. It was stated that civil servants had made significant mistakes in the way in which the risks for each bid had been calculated, leading to a too low default surety being required of bidders.
Two independent inquiries were announced; one headed up by Sam Laidlaw of Centrica, with Ed Smith, both from the Board of the Department for Transport; and the second headed up by Richard Brown of Eurostar. Three civil servants were also suspended.
During September 2012 the newly appointed Secretary of State for Transport, Patrick McLoughlin, had been warned of potential issues. On 2 October 2012, McLoughlin decided to cancel the franchise award. The Department of Transport had been due in the High Court on 3 October 2012 to respond to a Judicial Review sought by Virgin Rail Group.
On 5 October 2012, one of the three suspended civil servants, Kate Mingay, released a statement to correct the reporting of her role in the franchising process. Mingay began legal proceedings against the Department for Transport over her suspension, with a High Court hearing on 29 November 2012 rejecting her claim to have her suspension lifted. It was announced on 6 December 2012 that all three of the suspended civil servants, including Mingay, would return to work.
The government decided it would reimburse the four bidders for all costs incurred. This amounted to £39.7 million with a further £4.9 million paid to FirstGroup as reimbursement for mobilisation costs incurred.
Future
On 15 October 2012, the Department for Transport announced Virgin Trains would continue to operate the franchise for between 9 and 13 months until a short-term interim franchise for the West Coast could be run. In December 2012, Virgin was awarded a 23-month management contract until November 2014. In March 2013 the Secretary of State for Transport announced it would commence negotiations with Virgin to extend the franchise until 31 March 2017. These were concluded in June 2014, and in 2016 the franchise was again extended, to April 2019, with the next invitation to tender going out in October or November 2017 for a contract to be awarded in November 2018.
On 4 November 2016, the government announced that the franchise would be replaced in 2019 by a new franchise called West Coast Partnership, which will include operating High Speed 2 (HS2). Services are planned to begin on the first phase of HS2 in 2026. In January 2017, FirstGroup announced it would bid for the new franchise with a joint venture with Italian High Speed operator Trenitalia which currently operates c2c.Department for Transport announced in March 2017 that the new operator would have to have had experience in operating trains of upto 250mph.