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West Coast Rail: £50m Bill Left For Taxpayers

(c) Sky News 2013

Failures by civil servants over the West Coast rail contract will cost taxpayers at least £50m, MPs have said.

There was a lack of leadership at the Department for Transport (DfT) and a failure to "get basic processes right" over the West Coast fiasco, a report from the House of Commons Public Accounts Committee said.

The MPs raised fears that the basic mistakes could be repeated in future projects such as the London to Birmingham high-speed HS2 scheme and the London Thameslink project.

The report said the department had not learned from errors made in previous projects and senior managers failed to apply common sense during the West Coast bidding project.

Senior managers had also "missed clear warning signs, including from the (rail) industry, that there were serious problems with the (bidding) competition", the report claimed.

The committee said: "We are astonished that there was no senior civil servant in the team despite the critical importance of this multibillion-pound franchise."

After DfT errors in the process had been identified, Transport Secretary Patrick McLoughlin scrapped the bidding which had seen Virgin Trains lose out to rival transport company FirstGroup (LSE: FGP.L - news) in the battle for a new, 13-year West Coast franchise.

Instead, Virgin is carrying on running the West Coast service until November (Xetra: A0Z24E - news) 2014, with a new bidding process starting after that.

Unveiling the report, the committee's chairman Margaret Hodge said: "The DfT's complete lack of common sense in the way it ran the West Coast franchise competition has landed the taxpayer with a bill of £50m at the very least."

She added that the cost could be "very much larger".

Bob Crow, leader of the RMT transport union, said: "The stench from the fall-out of the West Coast franchise continues to hang over Britain's transport industry as it becomes clearer with every examination that the ministers responsible for this shambles could not be trusted to run a whelk stall let alone multi-billion Government contracts."

The report follows a Whitehall-commissioned independent inquiry into the West Coast bidding led by Centrica (LSE: CNA.L - news) boss Sam Laidlaw. The inquiry report was extremely critical of the DfT.

A DfT spokesman said the department had accepted all of the recommendations, and had taken steps to improve internal oversight and accountability.

Shadow transport secretary Maria Eagle said: "It's time that David Cameron took responsibility for the rail franchising fiasco, instead of allowing ministers to hide behind their civil servants."

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