VIRGIN founder Sir Richard Branson has indicated that his company could bid for the East Coast franchise. After he had challenged the West Coast process, which has now collapsed, he had said it was 'very unlikely' that Virgin would bid again unless the franchise system was reformed.
Virgin is currently locked in talks with the Department for Transport over the terms for carrying on with West Coast after 8 December, but although Virgin is widely reported to be staying for an emergency period of between nine and 13 months, so far no agreement has been announced. This means that the operater of intercity West Coast services from December is still officially unconfirmed.
Meanwhile all franchise reletting has been suspended by the DfT, although four contracts are due to be renewed next year, including East Coast.
The processes cannot restart until the results of two current inquiries are known and have been taken into account. The first of these, which is examining the specific reasons why the award of West Coast to FirstGroup had to be withdrawn, should publish its initial findings within the next two or three days. The second is analysing the DfT's methods of assessing franchise bids in general, and its findings may not be known until the New Year.
As a result, it seems unlikely at the moment that any franchise can be relet in 2013, which means that c2c, First Great Western and First Capital Connect may all have to be given emergency extensions of their own.
The Government remains determined to return East Coast to the private sector in due course, having taken it over in November 2009 after National Express surrendered the contract.
Virgin had bid for East Coast unsuccessfully on two previous occasions, when it had been beaten by GNER and then National Express. Neither of these operators proved able to pay the agreed premiums, and had been forced to walk away.
These failures had helped to provoke Richard Branson into challenging the West Coast decision, but his earlier stance of refusing to bid again now appears to have been modified, although there is no way of knowing when the East Coast competition might now be restarted.
He told the Sunday Telegraph: "What I would hope is that any new bidding process will take into account innovation, and the quality of ideas. We know what needs to be done on East Coast, and we think we’ve got the team to do it. It urgently needs investment and we’d be delighted to do it.”