East Coast Mainline could be back in public hands 'within weeks'
The troubled East Coast Mainline rail franchise could be back under public control within a couple of months, if not weeks.
Operator Stagecoach has told ministers it “got it numbers wrong” and would only be able to continue to run the service for a very short period.
Stagecoach, which owns 90% of the venture with Virgin the other 10%, had indicated it would hand over responsibility in 2020, well before the contracted 2023 date.
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Now, however, transport secretary Chris Grayling has told MPs the position is more precarious.
He said: “It has now been confirmed the situation is much more urgent.
“It is now clear that this franchise will only be able to continue in its current form for a matter of a very small number of months and no more.
“This will not impact on the railway’s day-to-day operations. The business will continue to operate as usual with no impact on services or staff on the East Coast.
“But it does mean I will need to – in the very near future – end the contract and put in place a successor arrangement to operate this railway.”
While Grayling has said that could be a couple of months away, others have speculated the situation could peak within weeks.
He added: “The problem is that Stagecoach got its numbers wrong. It overbid and is now paying a price.”
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The franchise has returned nearly £1bn to the public purse but this had cost Stagecoach losses of £200m.
Mick Cash, general secretary of the RMT union, called for Grayling to resign amid a “shameful fiasco”.
“East Coast should be renationalised with immediate effect and the scale of the scandal unveiled today should mark the point at which the whole rotten business of rail privatisation in Britain was called to a halt.”
Grayling said one option was to allow Stagecoach to continue operating the franchise on a short-term and not-for-profit basis until a new contract is awarded in 2020.
Alternatively, East Coast Mainline could be brought back under government control and be run by the Department for Transport – in effect, renationalisation.
“This option is very much on the table and will be selected if the assessment that I have set out determines that it offers a better deal for passengers and a better deal for taxpayers than the alternative,” he said.
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The East Coast Mainline franchise was taken into public ownership in 2009 after being run by National Express.
It was reprivatised when Stagecoach and Virgin signed a deal to run the East Coast line from 2015 to 2023, promising to pay the government £3.3bn to run the service.
Grayling also announced that another joint venture between Stagecoach and Virgin had won an extension to operate the West Coast Mainline rail service between London and Glasgow.