Embattled FirstGroup in pledge over service

Transport Correspondent

Friday 17 August 2012

RAIL passengers were promised more seats, faster services and new electric trains on Scotland's busiest cross-border route as part of a controversial 14-year contract awarded to FirstGroup yesterday.

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By DAMIEN HENDERSON

The new franchise agreement runs until 2026 and will end Virgin Trains' 15-year tenure on the West Coast Main Line from December 9, sparking a bitter war of words between the companies.

Virgin boss Sir Richard Branson said the Department for Transport decision was "insane" and risked repeating failures on the East Coast Main Line, which required government intervention after both GNER and National Express walked away from their franchise commitments.

Sir Brian Souter, whose Stagecoach company owns 49% of Virgin Trains, said he was "bitterly disappointed".The deal will see £5.5 billion handed to the UK Government by the Aberdeen-based transport giant over the course of the franchise – £700m more than that offered by Virgin.Shares in FirstGroup were down 6% yesterday – or 15.8p lower at 243.2p – seemingly reflecting the market's view that it had submitted a risky bid.First said average journey times between Glasgow and London will be cut by 15 minutes to 4hrs, 15min over the next four years.The company will introduce 11 new electric, tilting Pendolino trains running at up to 125mph between Edinburgh and Birmingham by 2016, and add 12,000 extra seats a day.And it promised to cut the price of flexible, on-the-day tickets – Standard Anytime – by 15%, bringing down the cost of a Glasgow to London single from £162 to £137.70. However, these are only thought to account for around 15% of tickets currently sold by Virgin, and an even smaller proportion in Scotland.FirstGroup spent much of yesterday rebutting accusations that it would drive down standards, force up fares and cut jobs. Chief Executive Tim O'Toole dismissed what he said had been "unhelpful speculation" and insisted its higher revenues would be delivered through an increase in passenger numbers.He said the company, which controls a number of other rail franchises including ScotRail and Great Western, had a track record of delivering its promises and had predicted a similar level of passenger growth to that achieved by Virgin, which more than doubled annual passenger numbers from 14m year to 30m this year.Sir Richard said it would be "extremely unlikely" that Virgin Trains would bid again to operate services after spending £14m on its latest bid."To have bid more would have involved dramatic cuts to customer quality and considerable fare rises which we were unwilling to entertain," he said.His concerns were echoed by rail unions and opposition politicians. Labour's Shadow Transport Secretary Maria Eagle said ministers had to "reassure taxpayers that they have not been swayed by an unrealistic bid."The RMT transport union said the FirstGroup bid was linked to "massive cuts to jobs and services and huge increases in fares".But Rail Minister Theresa Villiers said said the deal would deliver improvements for passengers. SHADOW TRANSPORT SECRETARY MARIA EAGLE

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Embattled FirstGroup in pledge over service

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