Richard Branson has said he is ‘devastated’ that Virgin Trains’ reign over the West Coast Main Line train route is coming to an end after 22 years.
The Department for Transport has awarded Aberdeen-based First Group and Trenitalia UK, an arm of Italy’s main train operator, the contract to run the London-to-Glasgow rail line from 8 December.
After the contract starts, more than 60 per cent of train journeys made on British railway lines will be made using services partly owned by foreign companies, analysis has revealed.
‘Devastated’: Richard Branson has said he is ‘devastated’ that Virgin Train’s reign over the West Coast Main Line train route is coming to an end after 22 years
The DfT barred Virgin Trains from bidding to keep hold of the West Coast Main Line route in April amid an ongoing pensions row.
Stagecoach, which owns 49% of Virgin Trains, was locked in a dispute with the Government about the huge deficit in the Railways Pension Scheme and who should help pay it off.
The Pensions Regulator wanted railway companies to accept that they would need to pay more cash into the scheme in coming years, but they refused and demanding the Government support the scheme instead.
Branson said at the time: ‘The Pensions Regulator has warned that more cash will be needed in the future, but no one knows how big that bill might eventually be and no responsible company could take that risk with pensions.
‘We can’t accept a risk we can’t manage – this would have been reckless. This is an industry-wide issue and forcing rail companies to take these risks could lead to the failure of more rail franchises.’
Virgin Trains, a partnership between Virgin Group and Stagecoach, has run services on the West Coast line since March 1997.
In an online blog, Branson said: ‘Our people have shown the rest of the industry how it should be done for more than 20 years and we wanted this to continue for many more years.’
Back in April, billionaire Branson warned that his Virgin Trains business could ‘disappear’ amid the Government’s decision to ban its partner business Stagecoach from competing for a number of rail franchises.
Virgin Trains is 49 per cent owned by Stagecoach and Sir Richard reacted angrily to former Transport Secretary Chris Grayling’s decision – driven by issues over the funding of pensions – to award the East Midlands Railway to rival operator Abellio.
First Trenitalia will pay the Treasury £1.6billion in premiums to run West Coast services until 2026. First Group will hold a 70 per cent stake in the partnership, with Trenitalia having a 30 per cent holding.
End of an era: Virgin Trains, a partnership between Virgin Group and Stagecoach, has run services on the West Coast line since March 1997
As part of the new First Trenitalia West Coast Mail Line route contract, passengers are being promised 263 extra services each week, more seats, station upgrades and new environmentally-friendly trains.
Aberdeen-based FirstGroup and Italian state-backed firm Trenitalia will also design and develop High Speed 2 as a ‘shadow operator’ and run HS2 from March 2026 until 2031, alongside its West Coast services.
RMT secretary Mick Cash has blasted the decision to award First Trenitalia the contract, branding the move a ‘political fix by a Government whose privatised franchise model is collapsing around their ears.’
Cash added: ‘Instead of following the popular public sector route the Tories are taking yet another gamble on the crucial West Coast lines with one of the dwindling number of private operator consortia left in the game in a move that RMT believes is doomed to failure and sure to result in yet more rail chaos.’
Route: The West Coast Main Line currently run by Virgin Trains
Shadow transport secretary Andy McDonald said: ‘It’s time for our railways to be brought into public ownership so they are run in the interests of passengers instead of ripping them off to line the pockets of profiteers and shareholders.’
Transport Secretary Grant Shapps said the bid was part of a shift to a new model for Britain’s railway lines.
Shapps said: ‘This award is positive news for passengers, with more services, more direct connections and ambitious plans for a cleaner, greener railway, and also represents a decisive shift towards a new model for rail.’
Shapps also told BBC Radio 4’s Today programme that the franchise would incentivise operators to run trains on time.
The DfT said that by December 2022, there would be 263 extra train services every week, with Motherwell set to become a major calling point for most West Coast Partnership services.
Direct services from London to destinations including Llandudno and Gobowen will also be introduced, while Walsall will get its first direct InterCity services.
Subject to approval from the Office of Rail and Road, First Trenitalia will operate two trains an hour between Liverpool and London. Virgin Trains had planned introducing a new hourly service between London and Liverpool from May 2021.
First Trenitalia said it would run 56 refurbished Pendolino trains and replace its diesel-powered Voyager fleet with a CO2 emission cutting fleet. The Pendolino fleet are set to get new seats, better toilets and additional luggage space, at a cost of £117million to the consortium.
Expansion: Italian-owned Trenitalia currently runs trains on the c2c line between east London and Shoeburyness in Essex
Shapps said the decision was supported by Keith Williams, who has been commissioned to look at changes to the rail franchising system
Williams, chair of the Rail Review, said: ‘The railway needs reform that prioritises the customers and communities it serves, with an absolute focus on delivering benefits for passengers.
‘I have also been clear that my review must not stop or delay investment and innovation. This West Coast Partnership delivers for passengers. It is a step forward that is firmly in line with the review, introducing benefits for passengers today and capable of incorporating the reforms needed for the future.’
Trenitalia currently runs trains on the c2c line between east London and Shoeburyness in Essex.