THE GROWING controversy over the award of the Intercity West Coast franchise to FirstGroup has taken a remarkable new turn.
Richard Branson has suggested that Virgin and Stagecoach should run the service on a not for profit basis for a while, so that the proposed contract can be investigated. The idea of postponement has already been greeted coolly by the Department for Transport, which is also facing a separate call from the Commons Transport Committee to put the process on hold.
An ePetition supporting Virgin has now attracted more than 100,000 signatures, which means that the issue is now eligible to be considered as the subject of a Commons debate.
Sir Richard raised the idea of a temporary 'free' extension to his contract, which is due to end on 9 December, in an article for the Sunday Telegraph.
In it, he said: "City analysts, politicians, media commentators and – most importantly – our many loyal customers have seized on this decision as outrageous, unjust and simply wrong.
“It is far better for MPs to have the chance to debate the issues, and question ministers on the detail before the decision is finalised. To assist in this process, there should be an independent audit of the DfT decision to ensure it has been based on correct criteria and reliable forecasting of customer numbers, revenue and payments to Government.
“If this process means extending the current franchise beyond December for a few months, I and my partners at Stagecoach would happily run the extended franchise on a not-for-profit basis, or donate profits to charity. We must ensure that this crucial decision is taken with all the facts correctly assessed and understood.”
The DfT is now facing pressure from several directions, including a potential inquiry into its procedures from the Commons Public Accounts Committee. The Transport Committee has gone further. Its chairman Louise Ellman has urged the Department to delay the final sign-off to allow time for an investigation into the robustness of the FirstGroup bid. This involves payments of £5.5 billion in premiums at net present value, topping Virgin's offer by £700 million.
A spokesman for the DfT said: "Our published processes and criteria do not provide for a role in a live procurement exercise for the Transport Select Committee, which has not requested any kind of dialogue on this issue before now.”
FirstGroup has dismissed Richard Branson's criticisms as 'hysterical', and maintains that its bid is realistic and achieveable. The company is currently set to sign the new franchise, which will last for at least 13 years and four months, later this week.