VIRGIN TRAINS has started court proceedings against the Department for Transport, in a bid to delay the signing of the Intercity West Coast contract which was awarded to FirstGroup almost a fortnight ago.
In a statement, Virgin said: "Virgin Trains Limited has today commenced Court proceedings in respect of the decision to award the West Coast Main Line franchise to FirstGroup. We have tried for three weeks to get clarity over the Department for Transport's decision and to have a number of key questions answered. On each occasion we have been refused information.
“We are left with no choice but to commence Court proceedings as we believe the procurement process has ignored the substantial risks to taxpayers and customers of delivering FirstGroup's bid over the course of the franchise.
"In addition it has ignored the DfT's own assessment that VTL's bid was more deliverable and a lower risk. We question whether FirstGroup’s bid has been correctly risk adjusted by the Department given all of its supposed incremental value is delivered after 2022.
“The current process is geared to selecting the highest risk bid and needs to be independently audited to prevent a repeat of former franchise failures."
Virgin founder Richard Branson said: "We had hoped that Parliament or an external review would be able to scrutinise this badly flawed process before the franchise was signed.
"However that opportunity would be denied if the DfT follows through with its determination to rush through the process before Parliament returns next week.
"That ignores the wishes of more than 150,000 people who signed the Downing St e-petition in 10 days, the Labour Opposition, two important Commons committees and many backbench Conservative MPs who wanted a debate before the decision is taken, not a post-mortem afterwards.
"We have not taken this decision lightly, but it is the only course now available to try to unravel this sorry process."
Virgin's action follows a statement by transport secretary Justine Greening earlier today that she intended to close the deal after the end of a 14-day 'cooling-off' period which ends at midnight tonight.
Ms Greening had remained unmoved by the threat of legal action from Virgin, which had also offered to run West Coast on a 'not for profit' basis to give time for the award to be reviewed. Virgin founder Richard Branson, who has described the DfT's method of assessing bids for rail franchises as 'insane', also said that his company will launch competing air services from London to Manchester and Scotland.
Ms Greening had insisted that the DfT would 'push on' with completing the deal, which she said was a good one for taxpayers.
FirstGroup responded to Virgin's legal challenge by saying: "We have every confidence in the DfT’s process which is rigorous, detailed and fair and in which bids are thoroughly tested. There has been no complaint about the process, which was carefully described in advance, until Virgin Rail Group had lost commercially.
"Our focus is to ensure a smooth transition with continuity for staff and passengers alike. We want to get on with delivering the many benefits and improvements we are offering without delay or disruption. We will continue to prepare for a successful start up of the new franchise on 9 December 2012."