Government terminates Virgin Trains East Coast franchise


"So on the same day we will start with the launch of a new long-term brand for the East Coast Main Line through the recreation of one of Britain's iconic rail brands, the London and North Eastern Railway, the LNER".

Rail services on the East Coast Main Line will be brought back under public control following the termination of the franchise agreement with Virgin Trains and the Stagecoach Group.

It will be the third time in under a decade that ministers have had to intervene.

He added there will be no sanctions against Virgin or Stagecoach for their failures.

The Stagecoach (90%) - Virgin (10%) joint venture was awarded an eight-year contract in November 2014 to operate inter-city services between London King's Cross, Leeds, Newcastle, Edinburgh, Aberdeen and Inverness.

Shadow Transport Secretary Andy McDonald accused Mr Grayling of treating the opposition and the Commons with contempt after withholding his statement until half an hour before he delivered it. He reiterated that, as the proposed East Coast Partnership contractual structure evolved, the ECML infrastructure would remain in the hands of the public sector via NR.

The British government is renationalising the rail route between London and Edinburgh, taking back the line from private operator Stagecoach after the company over-estimated the profits it could make on the route.

"I am creating a new board with an independent chair to oversee the operation of the LNER route which will work with my department on building the new partnership", Grayling told Parliament on May 16.

He said: "Every announcement is a smokescreen to divert attention from the failings of the Transport Secretary's policy". "We believe our plans offered a positive, value-for-money way forward for passengers, taxpayers and local communities, ensuring the continuation of the exciting transformation already underway on East Coast and a smooth transition to the Government's new East Coast Partnership", Stagecoach Chief Executive Martin Griffiths said.

"After three shambolic private sector failures on the East Coast the message should now sink in that these cowboys can not be trusted and should be locked out of the system on a permanent basis".

The government has said that it does not intend to strip Virgin and Stagecoach of the franchising passports which they hold, and thus they would be able to bid for future franchises.

"Come on Chris, East Coast line today, the whole system tomorrow", he tweeted, jokingly.