Last Tuesday, the Government invited offers for Inter-City West Coast in plans that will also include a pounds 1.5bn track upgrade and around pounds 500m of new rolling stock.
Crucially for Virgin, new 130 mph tilting trains could cut an hour off the London-Glasgow journey and half an hour off London-Manchester, making rail far more competitive with internal UK and international connecting flights.
BA is the only UK airline to fly the London-Manchester shuttle from Heathrow, Gatwick and Stansted. Cutting Glasgow and Birmingham journey times would bring a Virgin rail operation into competition with British Midland flights, too. "We've taken a conscious decision not to adopt a scattergun approach to rail bids, but only where they make strategic sense," a Virgin spokesman said.
"We're working on proposals right now. The chances of us not making a bid are extremely slim."
Today the Government reaches a milestone in rail privatisation, with four new franchisees starting operations.
With South Wales & West and Cardiff Rail, both won by Prism, the Isle of Wight's Island Line and South Eastern Trains - won by Stagecoach and Connex - 13 of the 25 franchises have now been awarded. More than half BR's network by passengers and revenue has also now moved into the private sector.
ICWC runs trains from Euston to the West Midlands, Wales the North-west and Scotland and the announcement came just in time for the Tory party conference in Bournemouth last week. Success, however, depends on bidders' ability to finance the tilting trains that will speed journeys from Euston.
In a novel departure, franchising director Roger Salmon has invited 14 firms who have prequalified to submit two separate bids for the 15-year franchise; one for tilting trains and the other for conventional rolling stock to modernise the fleet.
Ironically, British Rail pioneered the new technology with its now scrapped Advanced Passenger Train in the 1980s. Bidders now, however, will have to go to foreign makers to buy the tilting trains, which are already in use in Italy, Germany, Spain, Portugal and Scandinavia.
Virgin is the first of the Inter-City West Coast parties to declare its hand and may seek partners, possibly including the London & Continental Rail consortium where it already has a stake in running the Eurostar Channel Tunnel rail service.
Another serious bidder is understood to be James Sherwood's Sea Containers. Mr Sherwood has already declared his intention to buy two tilting trains, the UK's first, for the East Coast Main Line from Kings Cross, which he won in March.
Initial bids for Inter-City West Coast have to be in by mid-November, with a target date of March 1997 for award of the franchise, making it the last of the BR network to go.
Virgin, meanwhile, is also on the final shortlist for CrossCountry and West Anglia Great Northern, two of four franchises due to be awarded in the next batch at the end of November.
For CrossCountry it faces rival bids from Prism and Great Western, the privatised franchise based in Paddington.
The franchise runs long-distance services the length and breadth of the country and has huge leisure potential.
For WAGN, which includes the Skytrain service to Stansted, Prism is again competing along with a management/FirstBus team, Capital Railways and GB Railways.Reuse content