TAM the tank engine was confused.

Steam poured out of him as he tried to make sense of what the Fat Controller was saying. "I don't understand," said the little engine. "You are telling me that FirstGroup's £5.5 billion bid to run the West Coast Mainline service has gone belly up, they have handed back the keys, and now the passengers on my train will have to get out and push if they want to see London this side of Christmas?"

"It's progress," said the Fat Controller. "Free enterprise at work. FirstGroup made an enterprising move, it didn't come off and now passengers are free to get out and push."

Tam the tank engine blew more gaskets than he thought he possessed and switched on the tannoy. "I am sorry to announce ..."

Apologies to the many admirers of the Rev W Awdry's Railway Series. Perhaps the tale of the West Coast Mainline really will end happily ever after. It depends who is asked.

Sir Richard Branson, whose Virgin Trains lost out to FirstGroup after offering the Government £4.8bn for the new 14-year franchise, called the decision "insane".

It is never easy to drum up sympathy for a multimillionaire, particularly one who picked up Northern Rock for £747 million. With Sir Richard, however, the rail line between Scotland and London seemed to become as personally valuable to him as his airline. Services have indeed improved since he took over in 1997, thanks, in large part, to Network Rail's £9bn investment in infrastructure. With a better line, Virgin could run trains faster and more frequently, thus increasing profits and providing passengers with more choice and some lower fares. Even so, punctuality remains at 86.5%. In a note to passengers posted on Virgin Trains website yesterday, Sir Richard said the service had a 91% customer satisfaction score, "the highest ever awarded to a long-distance franchise".

What are the chances of the new franchise holders beating that after they take over the West Coast Mainline in December? Again, it depends who is asked. Let us imagine it is a ScotRail passenger. FirstGroup controls ScotRail, which proudly bills itself as "Scotland's Railway", making it sound almost nationalised in design and practice. ScotRail operates 95% of passenger services in Scotland.

ScotRail breaks down its punctuality figures according to service. So, for example, on the Edinburgh-Falkirk-Glasgow route, the target for punctuality is 92%. In the four weeks to July 21, says ScotRail, it reached 98.2%. All terribly impressive, until you read the small print on exclusions. Incidents such as trespass, flooding and, that general catch-all, "extreme incidents beyond the control of the railway industry", are excluded from the performance figures. These are exactly the type of things that ruin a journey and a day, but the stat crunchers don't wish to include them.

As every passenger knows, you can fit the Grand Canyon in the gap between how rail services say they are performing and the reality. When a passenger buys a ticket they do so in simple good faith that the train will get to its destination at the promised time. I was that wild and crazy type last week. Mission: travel from the suburbs of Glasgow to Edinburgh on a service leaving at 13.57, due to arrive in Waverley at 15.28.

The first delay was due to trespassers on the line. Then someone was taken ill on a train ahead. The reason for the third delay wasn't disclosed. Many, many, spells of waiting at red signals later, passengers were told to leave the train at Bathgate. We could just about squeeze on to the platform between the ranks of angry passengers who had suffered the cancellation of three previous trains.

The result of this mayhem? An hour late arriving in Edinburgh. Too bad if you had to be there on time for a meeting, a show at the Fringe, a connecting train, or to start a shift: the train operators could only apologise for the inconvenience caused. Welcome to modern Scotland, a go ahead kind of place unless you want to go ahead and get anywhere on time.

Train companies don't like travellers' tales of woe. They interfere with all those shiny statistics and pie charts. Yet individual experiences matter. Individual experiences determine whether you take a chance on the train again, go by car or coach, or don't go at all.

FirstGroup has promised to provide new trains, faster services and more (and sometimes cheaper) seats on the West Coast service, all the while increasing revenue by 10.4% a year. Sounds like a dream deal, but if it turns into a nightmare the firm can walk away (as happened with Great North Eastern Railways and National Express on the East Coast Mainline), having paid a penalty of £145m.

What other essential service would operate on this kind of pay as you go, or don't go, basis? The railways are busier than ever, with 1.3bn journeys made every year. Most of those travelling have never been more financially squeezed, yet they are having to pay above inflation prices for the privilege. In Scotland's case, regulated fares will go up by 4.2%. Didn't get a wage rise to allow for that? Well, we're sorry for the financial inconvenience.

The Scottish Government, as ever, says it wants to get more people off the roads and on to rail. Good luck with that given the price hikes in store.

When there is no choice but to take the train you just have to put up with the strain, be it on your wallet or your nerves. Faced with changes in ownership, increases in fares, the poor passenger can only sigh and plough on. Occasionally they might fantasise about the renationalisation of rail, long for a return of good old, bad old, British Rail. Given the state of the public finances, that train has left the station never to return.

Successive governments have tried to fix the railways but every one has bodged the job. Getting to that hallowed place of safe, economical and reliable rail travel has proven to be chaotic and costly, and we're a long way from the destination yet.

There are times in life when one can reasonably be expected to take a punt. Getting from A to B should not be one of them, yet that is what rail travel has become, a lottery on wheels. Who are the winners in all this? Not the passengers, you can bank on that.