Anger as plan is rolled out to reprivatise East Coast rail franchise

Sell-off is attacked as 'misguided' and 'completely the wrong decision' as Coalition tears up the timetable for franchising, causing huge delays
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The Independent Online

Politicians and unions have expressed rage after the Government set out plans to reprivatise the East Coast rail franchise in less than two years.

The London-to-Scotland route has been run by the Department for Transport since November 2009 after National Express handed the contract back to the Government.

But the Transport Secretary, Patrick McLoughlin, announced the start of a new bidding competition for the route that means it will be reprivatised in February 2015.

Maria Eagle, Labour's Shadow Transport Secretary, claimed that was a "misguided sell-off". She said: "It is completely the wrong decision to focus obsessively on an unnecessary privatisation of InterCity services on the East Coast, instead of prioritising getting the existing stalled franchise programme back on track. Ministers must be very careful not to mislead the public as they make their case for this misguided sell-off.

"The current not-for-private profit operator has returned £640m to taxpayers and reinvested a further £40m [in new trains], profit that in future will be shared with shareholders rather than benefiting passengers under the Government's plans."

Her comments came as the Government tore up its original timetable for rail franchising, and admitted some routes won't be under new ownership for eight years.

The DfT said it will stagger the schedule of rail franchising and "deliver no more than four competitions per year", after its first attempt at finding new operators for routes last year collapsed into chaos.

FirstGroup initially won the £13bn West Coast line last August, but Virgin Trains, the incumbent operator, a joint venture by Sir Richard Branson's Virgin group and listed Stagecoach, launched a legal challenge which led to the discovery of "significant technical flaws".

The West Coast contract was cancelled, and faced two independent reviews. Taxpayers are set to pick up a compensation bill which could hit £50m. But yesterday rail minister Simon Burns claimed he was confident the new franchising system would be "cock-up free".

Mr McLoughlin added: "This programme is a major step in delivering tangible improvements to services, providing long-term certainty to the market and supporting our huge programme of rail investment."

But the RMT's general secretary Bob Crow said after "wasting hundreds of millions of pounds of taxpayers' money on the franchising circus" the Government had "given the green light to a whole new wave of profiteering that will have the train companies laughing all the way to the bank".

The West Coast line, initially extended to be run by Virgin Trains until only next year, will now not face a new operator until 2017. The first of the new franchises to start will be Essex Thameside, where the franchise ends in May and will begin in September 2014.

Tendering for the South Eastern route, currently run as a joint venture by Go-Ahead and French state-owned rail business Keolis, has been delayed from April until June 2018. The Great Western franchise, run by FirstGroup and set to end in October this year, will now not have a new operator until July 2016. The London Midland route, which Go-Ahead operates, has been deferred from September 2015 to June 2017.