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Government to open bidding for East Coast rail line franchise
THE contest to re-privatise the East Coast rail line will be launched by ministers today (Friday, October 25) – to a storm of protest.
The department of transport (Dft) will announce details of the new franchise to operate the route and invite bidders to come forward.
Virgin, FirstGroup and a consortia led by SNCF, France’s state-owned rail company, are all expected to compete for the right to take over the East Coast.
Ministers will argue that only a new private operator – after four years of state ownership – can deliver the extra cash to improve services for passengers.
But the launch of the new franchise will spark fierce criticism from Labour, trades unions and some passenger groups, who insist the line is highly successful in state hands.
They say East Coast profits currently being reinvested in a better rail network - £40m, between 2009 and 2012 – would be lost to private shareholders.
There are also fears of a third “franchise fiasco” after both National Express and GNER handed back the keys, when they ran out of cash.
Last night, Mary Creagh, Labour’s new transport spokeswoman, said: “East Coast is working well and will have returned £800m to the taxpayer by the end of this financial year.
“David Cameron should tackle his Government’s cost of living crisis and cap rail fare rises for struggling commuters, instead of obsessing about handing East Coast over to the private sector.”
Under a timetable set out earlier this year, the East Coast contract is due to be awarded in October next year, with the franchise starting in February 2015.
However, insiders have warned that schedule is already slipping, which could push the contract award right up to the edge of the general election, in May 2015.
In such circumstances, Labour will argue that the award should be blocked, to avoid tying the hands of an incoming Government.
It has also argued for state-owned Directly Operated Railways (DOR) – which took over the East Coast in 2009 – to be allowed to bid, if a contest is held.
But, in a recent Commons debate, then rail minister Simon Burns urged Labour MPs to recognise that “the Government is not wash with unlimited amounts of money”.
He said: “We are more ambitious for the East Coast main line. And we believe - from the experience of other franchisees - that they are prepared to invest their money as well.
“That will ensure there is more investment in improving the services for passengers – that’s the key issue.”
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