The troubled history of the East Coast rail franchise

Exclusive: Government to 'renationalise' East Coast rail after string of failures

East Coast Mainline: Government Expected To Renationalise One Of Britain's Busiest Railway Lines

Many people have criticised the government's decision to allow Virgin Trains East Coast to walk away early. It will be run as a wing of the Department for Transport under the leadership of the consultants Arup for up to two years.

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

The decision to end the £3.3 billion contract this year has been described as a "bailout" by Labour and trade unions. "Come on Chris, East Coast line today, the whole system tomorrow", he quipped.

To have one rail company fail to fulfil its contract may be regarded as a misfortune.

The government insists that the East Coast service is not failing, and will continue to make generate revenues for the public purse.

McDonald pointed out that the government had failed to impose restrictions on what Virgin and Stagecoach could do next, calling the statement "a smokescreen to divert attention from the failings of his policy".

"When it is fully formed the new LNER operation will be a partnership between the public and private sectors", he said, while adding that the final structure remains to be determined.

LNER will have a new board and an independent chairman, and in a departure from past practice will feature representatives of both the train operating team and state-backed track owner Network Rail Ltd., Grayling said.

Grayling said: "The route continues to generate substantial returns for the government".

Better that those losses be borne by shareholders of companies like Stagecoach than by taxpayers - the vast majority of whom never actually use a train from one year to the next.

Stagecoach and Virgin were contracted to run the lines, which include the London-Edinburgh run, until 2023, but had already cut that short to 2020 after admitting they had overestimated passenger numbers.

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Shadow chancellor John McDonnell welcomed Grayling's decision.

Green Party MP Caroline Lucas tweeted that public ownership should be extended the rest of the rail network.

Chris Grayling, the Transport Secretary, will pull the plug on the East Coast rail franchise after a string of failures by Stagecoach and Virgin.

The franchise, which operates trains between Edinburgh, Aberdeen, Inverness, Glasgow and King's Cross, was operated by the UK Government from 2009 to 2015 after the last collapse.

"But when in private hands it failed - not once, but three times - and the Government has had to bail out the franchise again".

It's also further ammunition for a Corbyn labour Party committed to renationalising the railways.

"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".

And while memories of British Rail's stale sandwiches may have faded - strikes, costly commuter fares, cramped carriages and failing companies are hardly likely to endear passengers to the current crop of private rail operators. "But the organisations have paid a high financial and reputational price for what has happened".

The Department for Transport assessment was that either immediate option, a fresh Virgin Trains contract or direct control, was broadly similar in cost.

The DfT has reassured passengers that journeys will not be affected.

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