[Update] FirstGroup WCML franchise Award revoked

[Sirius]

I would say this Government has grown a pair but they have not, in the end they had no legal choice other than to agree a review.

LOL Nice One - Good news for a change !!!

FirstGroup's award for running the West Coast Main Line from 9th December has been Revoked.

Originally Posted by Sky News

The decision to award the West Coast Main Line franchise to FirstGroup has been cancelled due to flaws in the way the process was conducted.

The decision was announced by Transport Secretary Patrick McLoughlin.

It means the Department for Transport (DfT) will no longer be awarding a franchise contract to run the West Coast service when the current franchise expires in December.

FirstGroup was due to take over the running of the London to Scotland line after being awarded the contract by the DfT in August, but Virgin Rail, which currently runs the service, launched a High Court challenge against the decision.

The DfT said it would be no longer contesting the judicial review sought by Sir Richard Branson's company.

Mr McLoughlin has also ordered two independent reviews into the competition process.

The flaws uncovered by the DfT relate to the way the procurement was conducted by department officials, it said.

It said the flaws stemmed from the way the level of risk in the bids was evaluated.

This makes Sir Richard Branson, a very happy man:-

Originally Posted by Sir Richard Branson

"I took a call this evening in New York from the UK Secretary of State for Transport, Patrick McLoughlin, telling me that he will no longer be awarding the West Coast Main Line franchise to FirstGroup.

From the moment we found out that FirstGroup had been made the preferred bidder with a completely unrealistic bid, we questioned the way the offers had been assessed, and asked Government to review and explain how it came to its decision.

We were convinced the process was flawed but despite our best efforts we were met with silence by the Department for Transport. We also asked for government to appoint an independent advisor to look at the situation, which was turned down. Reluctantly we were forced to seek a judicial review. Tomorrow the DfT were meant to have given their evidence to the court.

I am pleased to say that the DfT has looked at all of the facts and found significant flaws in the way its officials handled the process. They have basically acknowledged that what we had been saying is correct. The same procedures were not followed and 'deeply regrettable and completely unacceptable mistakes' were made by the Department.'

At the House of Commons Select Committee we called for all franchise competitions to be paused and a thorough, independent review of the process. We are grateful that Patrick McLoughlin is now doing this.

We also appreciate the DfT publicly acknowledging these errors, and are hopeful they will now accept that Virgin Trains should carry on running the West Coast Main Line and ensure that passengers continue receiving our team's award-winning service.

Finally, I would like to thank our staff for their incredible work through unsettling times and to all our passengers who have been so supportive. I would particularly like to thank those who signed Ross McKillop's e-petition that resulted in the House of Commons debate, and all those who believed that we were right in thinking there was a case to answer."

http://news.sky.com/story/992425/wes...ise-award-axed

[denphone]

Thats excellent news.

[Ravenheart]

well that's a positive start to the morning

[Sirius]

Originally Posted by Ravenheart

well that's a positive start to the morning

Not for those who may have to pay back sweeteners

Well done Sir Richard

[Wicked_and_Crazy]

Originally Posted by Sirius

I would say this Government has grown a pair but they have not, in the end they had no legal choice other than to agree a review.

The government had all the choices they needed. If First made a stupid bid that's no ones business but their own. The government should then manage them and impose penalties where they fail.

Originally Posted by Wicked_and_Crazy

If First made a stupid bid that's no ones business but their own.

Actually it's not. The Government's responsibility is to see that the franchise is handed to a company that can fulfil it, not hand it to a reckless bidder and then sit back and wait to collect the fines.

First's bid was widely derided because it claimed it could massively increase passenger numbers on a route that's already close to capacity and because almost all of the additional cash over and above what Virgin was promising was back-loaded on the final couple of years of the franchise, i.e. so far in the future that if they failed and had to bail out, the taxpayer would have had no additional benefit over and above what would have resulted from the incumbent remaining in charge.

---------- Post added at 08:08 ---------- Previous post was at 08:00 ----------

I wonder what went on in the DfT over the past few weeks though. Justine Greening and then Patrick McLoughlin were both so adamant the franchise was properly assessed and awarded but then seemed in a right hurry to conclude it in the face of all the complaints. Now there are suddenly "significant technical flaws" evident in the risk assessment. I'd suggest Greening's head should be on the block were it not for the fact she's already had the chop. The question now is, having come in after the horse had bolted, how much did McLoughlin actually know about the decision-making process? Did he simply believe what Sir Humphrey told him?

Highlights how stupid the original decision was and vindicates Virgin's claims that the process was flawed and that FirstGroup's bid was high-risk and unlikely to be delivered. Any rational person would have looked at FirstGroup's offer of more trains, with more seats, at cheaper prices with more money being delivered and asked 'How is this possible?'.

Still thankfully the Government has seen sense and revoked the bid, would rather people own up to their mistakes and fix it than blindly press ahead to avoid being found out.

So what 'mistakes' did the bidding process have? Was it just that they didn't check if a bid's claims were actually achievable and simply gave it to the highest bidder?

Seeing as they have pulled the plug on it before it got aired in court, we may never know ...

---------- Post added at 08:37 ---------- Previous post was at 08:26 ----------

I think we may actually have a debt of gratitude to First here. They submitted a bid that everyone except First seemed to believe was inachievable, yet it went through the DfT's assessment process and came out the winner. Had First's bid been only mildly crazy, rather than suicidal (as it was described by some "industry watchers" at the time), we may never have seen a proper review of what is now obviously a deeply flawed process.

The Government has said it will be run by the state until a new process is completed but the same trains and staff will be used? How is that possible? Why not take Virgin up on the offer to run it in the interim as a non-profit (I guess that gives them a unfair advantage when it comes to bidding).

[MalteseFalcon]

So who actually has the franchise in December then? Got a relative travelling down for Christmas and she uses Virgin trains, so am just wondering if there will actually be any trains running on the WCML.

[Osem]

I wonder what the true nature of the 'errors' was and whether those directly responsible will be held accountable in some meaningful way. As for resignations, well I think it's a tad harsh to seek someone's demise if they've relied, in good faith, on assessments made by supposedly reliable officials who turned out not to be. Having said that, if the mistakes made should have been quite obvious or, worse still, were known but 'overlooked' for reasons of expediency then that's a very different matter and perhaps heads ought to roll.

Originally Posted by Damien

The Government has said it will be run by the state until a new process is completed but the same trains and staff will be used? How is that possible? Why not take Virgin up on the offer to run it in the interim as a non-profit (I guess that gives them a unfair advantage when it comes to bidding).

I suspect the procedure for running an unfranchised line is set down in the original legislation that privatised the railways. If not there, then there must be an established legal basis elsewhere because the East Coast has been run by the State since 2010.

The staff who operate the service for Virgin would have transferred to First via TUPE anyway so there is no problem with them transferring to employment by the State in the meantime. The trains are leased, not owned, and the timetable is already planned months in advance so it would actually be more difficult to try to change it than to simply carry on.

Pretty much the whole of VT's staff will continue as normal while this mess is sorted out. The only visible change will be that the operation will have to be de-branded. Branson's offer to run it without profit was a canny one as he was never going to be allowed to run it for a profit under these circumstances - all he was really after was keeping the Virgin brand stuck to the outside of the trains for a bit longer. It seems he may not get that wish.

---------- Post added at 09:08 ---------- Previous post was at 08:55 ----------

I have altered the thread title as it is becoming clear that whatever happens on 9 December, Dickie B. won't be running it ...

[Derek]

So if I'm reading this right the conservatives have basically (temporarily) re-nationalised a chunk of the railway system?

Not yet ... Virgin has the franchise until 8 December. But yes, come 9 December they will have no choice but to take the WCML under State control, and we will have a situation where both of the most important inter-city routes are run by the State, because the ECML has been that way for 2 years now.

State-run trains zipping along State-owned tracks ...