THE IDENTITY of the next Intercity West Coast operator should be announced after the weekend, but withdrawal of the award to FirstGroup could affect the franchising timetable for years to come.
The contract was announced in August, only be cancelled by the DfT last week after serious miscalculations had come to light. The discovery was apparently made as the Department prepared to give evidence to the High Court in a case brought by runner-up Virgin Trains, which had challenged the accuracy of the process.
Speaking at the Conservative Party conference, transport secretary Patrick McLoughlin said a decision about who will run West Coast temporarily from December will be announced to Parliament on Monday, but he admitted the full franchise might not be relet for 18 months. He could not say when the general franchising programme will be resumed.
If West Coast trains are to keep running from 9 December, the immediate choices appear to be a new contract with Virgin, which would almost certainly be a fixed-fee arrangement rather than a true franchise, or direct operation by the Government via the DfT's company Directly Operated Railways.
Mr McLoughlin must make his decision within the next few days because time to complete a handover from the present Virgin franchise is running out. A labyrinth of supporting contracts is still awaiting completion, ranging from track and depot access rights to leases of stations, and the employment contracts of some 2,900 staff will also need to be confirmed.
Virgin has warned that if DOR takes over on West Coast Virgin Trains will have to be disbanded, which would make it very difficult for it to bid again in the future, and is also understood to have expressed doubt about the DfT's ability to take over in time, during crisis talks on Monday.
The Daily Telegraph has quoted Virgin Trains chairman Patrick McCall as saying: "I said to them, ‘you’ve just proved you can’t run a procurement. How can you prove you can handle 150 commercial contracts?' "
FirstGroup is still considering its options after the award was withdrawn on 3 October. Its shares fell by 20 per cent in the wake of the decision, and First's chief executive Tim O'Toole said that as his shareholders had been wronged, "I had better find out why".
Work on three of the franchises due to be renewed next year has been suspended while two reports on the West Coast problems are completed. Their conclusions must then be taken into account by the DfT in planning its future work, which could mean that the reletting of franchises in general cannot restart until later in 2013 at the earliest.
This means that the DfT is now faced with the task of extending the present c2c, First Great Western and First Capital Connect franchises, all of which will expire next year, and must also consider whether its plan to return East Coast to the private sector in December next year is still feasible.