THE DEPARTMENT FOR TRANSPORT says it has received a letter from Virgin Trains which is a 'precursor' to legal action over the award of the Intercity West Coast franchise to FirstGroup. The transport secretary has confirmed that the contract is to be signed with First after the 14-day 'cooling-off' period expires at midnight tonight.
It is reported that lawyers were working with Virgin over the bank holiday weekend, paving the way for an application to the High Court for judicial review of the DfT's decision, although Virgin has yet to reveal whether it will take this path.
The transport secretary Justine Greening has remained unmoved by the threat 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 insisted that the DfT would 'push on' with completing the deal, which she said was a good one for taxpayers.
A spokesman for the DfT could not say when the final signing would take place, but agreed it could be as soon as tomorrow. He also confirmed that Virgin had given notice of the possibility of legal action. He said: "We are in receipt of a letter from Virgin Trains which is a precursor to legal action. We are reviewing the correspondence. The Department is confident in the process it undertook and the decision made in awarding the West Coast franchise."
FirstGroup is maintaining that its £5.5 billion bid is deliverable. First's chief executive Tim O'Toole said his company had won the competition for West Coast 'fair and square'.
There has yet to be any reaction from the Commons Transport Committee to today's developments. Its chairman Louise Ellman had called for confirmation of the contract to be deferred until her Committee had been given a chance to assess the Department's calculations and also hear evidence from the main parties involved.