Government to 'renationalise' East Coast rail after string of failures

HeraldScotland SERVICES More Saturday services are being added by train firm Virgin on the East Coast railway

Exclusive: Government to 'renationalise' East Coast rail after string of failures

Rail services on the East Coast Main Line will be brought back under public control after ministers axed the deal with operator Virgin.

Speaking in the Chamber today, Shadow Transport Secretary Andy McDonald claimed Grayling had treated the Commons with contempt by failing to provide the opposition with an electronic copy of the statement.

"Despite today's news, we believe that we can continue to make a positive contribution to the United Kingdom rail market, delivering long-term customer benefits and sustainable returns for taxpayers and investors", he added.

It comes after operators Virgin and Sir Brian Souter's Stagecoach could no longer meet the promised payments in the £3.3bn contract.

Stagecoach and Virgin Trains got their bid wrong and they are now paying the price. "Privatised rail is broken beyond fix yet the Tories are still handing these services back to the private sector because they are wedded to a broken free market ideology".

Both the firms and the government reject that suggestion. However, several train companies face similar struggles to Stagecoach and Virgin after overbidding for franchises and events may yet force his hand again.

He added that the firms operating the franchise, which is held under a joint venture between Stagecoach and Virgin owning 90% and 10% respectively, "will have lost almost £200mln" but this had not been a loss to taxpayers "at this time". But he added they wouldn't be excluded from bidding to run other parts of the network in future.

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Mr Grayling announced yesterday that Virgin Trains east coast would be stripped of its franchise next month, the third time in little over a decade the operator on the line has collapsed.

Passengers and staff shouldn't see any disruption to day-to-day services, according to the transport secretary.

He expected the majority of the enhanced services planned by Virgin and Stagecoach for delivery by 2023 to be implemented by LNER, although this would largely depend on the ability of infrastructure manager Network Rail to deliver them.

'So on the same day we will start with the launch of a new long-term brand for the East Coast Main Line through the recreation of one of Britain's iconic rail brands, the London and North Eastern Railway, the LNER.

Why do I have a sense of deja vu?

Moreover, Virgin Trains has returned 30% per year more to taxpayers during its time running the route than did DOR, making it a much better-value option for taxpayers.

What would you like to know about the future of East Coast Mainline rail franchise? "Virgin and Stagecoach have managed reverse alchemy - by turning gold into base metal, and profits into losses on the east coast". Let us know and a selection of your questions will be answered by a BBC journalist.

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