THE GOVERNMENT has named Virgin Trains as the most likely operator of intercity services on West Coast after 8 December, and officials are now said to be working 'flat out' to agree terms for a temporary contract of between 9 and 13 months. This would then be followed by two more contracts.
The emergency solution -- already dubbed a 'total shambles' by Labour -- has emerged after the collapse of the West Coast franchise award to FirstGroup on 3 October, which was caused by failures within the DfT.
Transport secretary Patrick McLoughlin said: "The cancellation of the InterCity West Coast franchise is deeply regrettable and I apologise to the bidders involved and the taxpayer who have a right to expect better.
"My priority now is to fix the problem and the first step is to take urgent action to ensure that on the 9 December services continue to run to the same standard and passengers are not affected.
"I believe Virgin remaining as operator for a short period of time is the best way to do this and my officials and I will be working flat out to make this happen."
The framework now planned will consist of three successive contracts. The first, which is being negotiated with Virgin, would last for up to 13 months. The second will be a short 'interim' franchise of perhaps two years, open to any bidder, and finally a long-term contract which is expected to run until about 2026.
It is not yet clear how the first, emergency contract would work, and in particular whether it might be on a 'not for profit' basis. Virgin said it believes a short-term agreement would not breach European procurement laws, but the exact terms have yet to be agreed.
FirstGroup has not revealed whether it is considering legal action claiming compensation for its loss of the West Coast contract, but a company spokesman said today: "We believe the private sector provides the most effective and efficient way to deliver passenger rail services in the UK. We await the outcome of the independent investigations into the ICWC franchise competition and the wider rail franchising process, which we hope will provide a greater degree of certainty and confidence."
The announcement of an expected Virgin extension was condemned by the RMT union, whose general secretary Bob Crow said: "We are now told Virgin will cling on for a few months while an expensive, short term franchise competition is run before a further costly, long term contract exercise. We could end up with the nightmare of three different franchise holders in a few years on our most high profile rail route while tens of millions of pounds is wasted on the franchise merry go round and thousands of staff are caught in the cross fire.
"This is pure lunacy and all designed to block the logical and stable option of public ownership."
Meanwhile, while talks with Virgin continue, the question of the eventual bill for the taxpayer is also outstanding. A figure of £40 million has been quoted by the DfT, which is refunding the money spent by the four bidders last time round, but there are fears that it could be considerably higher when all the associated expenses have been taken into account, including Departmental time and legal costs.