Virgin may keep hold of rail route for years

Transport Correspondent

Wednesday 10 October 2012

VIRGIN Trains could run London to Scotland train services for "several years" on a not-for-profit basis if its offer is taken up by the Department for Transport (DfT).

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DAMIEN HENDERSON Transport Correspondent

The company, which is 49% owned by Stagecoach, has been given legal advice that running the West Coast route under a temporary management contract would not leave the UK Government open to being sued by FirstGroup, The Herald understands.

A source familiar with the discussions claimed this had put Virgin in a stronger position to continue operating trains after December 9, when its existing contract expires, though DfT lawyers were said to still be forming their opinion on the issue.First was due to take over the cross-border route as part of a £13 billion deal which was cancelled last Wednesday after errors by the DfT were discovered in the bidding process.The Aberdeen-based company, which had £244m wiped off its share value, is considering whether to sue the DfT for loss of earnings, either from having its contract cancelled or seeing the service pass to Virgin.The industry source said an extension to Virgin's contract was unlikely to be short term, given that a new contest will have to wait until a review of the DfT's entire franchising process is completed by the end of the year.Virgin has been pushing the DfT to extend its contract to run the services, either on a not-for-profit basis or with profits being handed to a charity.The other option is for Directly Operated Railways (DOR), a company set up by the DfT to take over East Coast train services in 2009, to run the West Coast route.

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Virgin may keep hold of rail route for years

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