Government to take control of East Coast Main Line from Stagecoach Group

16 May, 2018, 16:51 | Author: Wade Massey
  • British government takes direct control of East Coast franchise

The East Coast main line franchise is a joint venture of Stagecoach, which owns 90% of the franchise, and Virgin, which holds 10%.

The London to Edinburgh service, which runs through Peterborough, will be taken back into public control on June 24.

The loss-making service is being renamed London and North Eastern Railway (LNER).

Transport Secretary Chris Grayling is expected to make a statement to parliament shortly.

The Department for Transport (DfT) announced in November that the franchise would have to be replaced in 2020 - three years earlier than Stagecoach and Virgin Trains' contract was due to end - after the rail companies said they would fall into financial trouble if they kept the franchise.

Employees working for Virgin Trains East Coast will transfer over to LNER.

"They will then begin the task of working with Network Rail to bring together the teams operating the track and trains on the LNER network".

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In February Mr Grayling said the franchise would only be able to continue in its current form for a "very small number of months" as Stagecoach had "got its numbers wrong" and "overbid".

'I plan to use a period of Operator of Last Resort control to shape the new partnership.

"In all circumstances ownership of the infrastructure will remain in the public sector, but the railway is at its strongest when it is a genuine partnership between public and private".

However, he also said: "The route has its challenges but it is not a failing railway".

The public transport operator said the UK Department for Transport has made a decision to appoint "Operator of Last Resort" for the East Coast train service and is "no longer considering" entering into a new franchise contract due to heavy losses incurred by Stagecoach and Virgin.

"East Coast is now the top-rated franchised train service in Great Britain - with 92 per cent overall satisfaction with the last journey in the latest National Rail Passenger Survey".

The collapse of a franchise awarded only in 2014 marks the third time in a decade that private companies have bailed out of running the 400-mile-route, fueling an argument over the future of the railway nearly 25 years after the network was privatized.

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