East Coast tender takes step forward

The Northern Echo: East Coast Main Line: Three bidders shortlisted in line franchise East Coast Main Line: Three bidders shortlisted in line franchise

THE controversial re-privatisation of the East Coast rail line has taken another step forward, with a call for detailed bids to be submitted.

An invitation to tender (ITT) for the franchise was issued by the department for transport (Dft) yesterday (Friday, March 21), promising “faster and more frequent services” by 2020.

New routes including Middlesbrough and Sunderland (via Newcastle), Harrogate (via York) and Scarborough are also possible, the Dft said.

Stephen Hammond, the rail minister, said: “Franchising has been a force for good for our railways, delivering record growth to an industry that was once in decline.

“The time is now right for us to find a long-term partner for the East Coast franchise, who can use their private sector expertise and knowledge to build on the significant investment planned for the route.”

But the move is bitterly opposed by Labour MPs, the trade unions and some passenger groups, who argue it is unnecessary and risky.

Profits - currently being reinvested in a better rail network, from a successful state-run line - will now be lost to private shareholders, the critics say.

And there are fears of a third “franchise fiasco” after both National Express and GNER handed back the East Coast keys, when they ran out of cash.

Ministers were also accused of trying to hide the success of the East Coast line in state hands in the franchise prospectus, to make the case for re-privatisation.

The three shortlisted bidders are:

* Inter City Railways Limited (a consortium of Stagecoach and Virgin).

* A consortium of French-owned Keolis and Eurostar International, which runs cross-channel services.

* First Group.

The franchise is due to start next February – with the contract awarded in October – but ministers are in a race against time, with the general election just 14 months away.

Comments (6)

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10:08am Sat 22 Mar 14

David Lacey says...

Let's hope that the people in the DfT who appraise the bids are smarter than the idiots who mucked up the West Coast franchise.
Let's hope that the people in the DfT who appraise the bids are smarter than the idiots who mucked up the West Coast franchise. David Lacey
  • Score: 0

10:31am Sat 22 Mar 14

AllAboardTheSkylark says...

This is nothing more than ideology.

Since ECML trains were put back into state ownership, they have become the most profitable rail operation in the UK with all monies being re-invested in the service.

66% of the population want the railways re-nationailsed*. Instead, the government wants to pour hundreds of millions of taxpayers cash into the pockets of Hedge Funds and "investors" by way of subsidies to these supposed private operators.

In just one year, 2012, Branson awarded himself a £15 million "personal dividend" from Virgin Trains. In total, he has awarded himself £204 million in dividends since Virgin Trains was set up. Yet, in all that time, he has invested just £4.1 million back into the company** At the same time, Virgin has been paid £2.79 BILLION in subsidies by the taxpayer, plus £9 billion in taxpayer funded "service upgrades".

Of course companies are queuing up to buy - it's literally a gravy train.

* Source: YouGov
** Source: Sunday Times 1/7/12 and others.
This is nothing more than ideology. Since ECML trains were put back into state ownership, they have become the most profitable rail operation in the UK with all monies being re-invested in the service. 66% of the population want the railways re-nationailsed*. Instead, the government wants to pour hundreds of millions of taxpayers cash into the pockets of Hedge Funds and "investors" by way of subsidies to these supposed private operators. In just one year, 2012, Branson awarded himself a £15 million "personal dividend" from Virgin Trains. In total, he has awarded himself £204 million in dividends since Virgin Trains was set up. Yet, in all that time, he has invested just £4.1 million back into the company** At the same time, Virgin has been paid £2.79 BILLION in subsidies by the taxpayer, plus £9 billion in taxpayer funded "service upgrades". Of course companies are queuing up to buy - it's literally a gravy train. * Source: YouGov ** Source: Sunday Times 1/7/12 and others. AllAboardTheSkylark
  • Score: 3

1:58pm Sat 22 Mar 14

David Lacey says...

It is estimated that 19,000 new and replacement coaches are needed by 2030. Each costing up to £1million (depending on design). Where is the money going to come from if the railways are renationalised?
It is estimated that 19,000 new and replacement coaches are needed by 2030. Each costing up to £1million (depending on design). Where is the money going to come from if the railways are renationalised? David Lacey
  • Score: 0

9:38pm Sat 22 Mar 14

bambara says...

To David Lacey to answer your question lets simply quote the previous comment:

"Since ECML trains were put back into state ownership, they have become the most profitable rail operation in the UK with all monies being re-invested in the service."

That is ALL the money goes back into the service.

Now compare that to the figures quoted for Virgin where the amount invested amounted to 2% of the personnal dividends of Mr Branson, and hey presto, re-nationalisation shows a re-investment rate > 50x as high as privatisation.
To David Lacey to answer your question lets simply quote the previous comment: "Since ECML trains were put back into state ownership, they have become the most profitable rail operation in the UK with all monies being re-invested in the service." That is ALL the money goes back into the service. Now compare that to the figures quoted for Virgin where the amount invested amounted to 2% of the personnal dividends of Mr Branson, and hey presto, re-nationalisation shows a re-investment rate > 50x as high as privatisation. bambara
  • Score: 3

11:07am Sun 23 Mar 14

David Lacey says...

I'm afraid that you haven't answered the question. The cost of new rolling stock needed by 2030 is between £10 and £20 billion. Simply referring to revenue income ignores capital investment. My question is simple. If the railways are renationalised where will the billions needed for capital be found?
I'm afraid that you haven't answered the question. The cost of new rolling stock needed by 2030 is between £10 and £20 billion. Simply referring to revenue income ignores capital investment. My question is simple. If the railways are renationalised where will the billions needed for capital be found? David Lacey
  • Score: 1

6:25pm Sun 23 Mar 14

oliviaden6 says...

It will be a crying shame WHEN the line is hived off again, It is making money for us the tax payers why sell it. In selling it the only ones getting fat will be the fat cats, at the expense of the traveling general public.
I believe it should stay in the public domain full stop.
It will be a crying shame WHEN the line is hived off again, It is making money for us the tax payers why sell it. In selling it the only ones getting fat will be the fat cats, at the expense of the traveling general public. I believe it should stay in the public domain full stop. oliviaden6
  • Score: 0

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