FirstGroup's East Coast bid referred but Virgin cleared
The rail industry was caught off guard yesterday after Virgin's bid for the East Coast mainline was cleared but FirstGroup found itself packed off to the Competition Commission for a six-month inquiry.
The surprise decision by the Office of Fair Trading means the Strategic Rail Authority will be in the awkward position of announcing a preferred bidder for the route between London and Edinburgh, which is currently operated by GNER, before the commission has completed its investigation.
Under the present franchising timetable, the SRA is due to name a preferred bidder in February. But the commission is not due to report back until June. The new franchise is due to start in May. The OFT said it had decided to refer FirstGroup because it had failed to offer any undertakings on pricing and ticketing which would overcome its concerns about competition on mainline routs between Doncaster, Grantham and London and also on some routes in North Yorkshire. FirstGroup also owns Hull Trains, which operates long-distance services on the east coast route, and Trans-Pennine, which runs some competing services on the line.
In contrast, Virgin was cleared because it did offer the OFT undertakings which would be sufficient to overcome competition worries should it win the franchise. Virgin, which is bidding in partnership with Stagecoach through the InterCity Railways joint venture, also operates the West Coast mainline and Cross Country Trains. On some services such as Leeds and Newcastle to Edinburgh, it would have 60 per cent or more of the public transport market, including rail and coach services.
The fourth bidder for the route, which carries about 15 million passengers a year and generates revenues of £400m, is a joint venture between Danish state railways and the freight operator EWS.
Moir Lockhead, the chief executive of FirstGroup, said he was surprised the company had been referred. But he added: "We are confident we will find a way through with the competition authorities."
The SRA also played down the possibility that the commission could either block FirstGroup outright or impose such conditions that it surrendered the franchise.
- 1 Notting Hill Carnival: Woman shares selfie after being ‘punched in face for telling man to stop groping her’
- 2 Keira Knightley topless: Usually conservative actress does own take on #Freethenipple campaign for Interview Magazine
- 3 Oil tanker with $100 million cargo goes missing off Texas coast
- 4 George Galloway left with severe bruising after attack in Notting Hill by man 'shouting about the Holocaust'
- 5 Medina: Saudis take a bulldozer to Islam's history
YouTube video posted by Isis militants shows 'execution of 250 Syrian soldiers'
Keira Knightley topless: Usually conservative actress does own take on #Freethenipple campaign for Interview Magazine
Oil tanker with $100 million cargo goes missing off Texas coast
George Galloway left with severe bruising after attack in Notting Hill by man 'shouting about the Holocaust'
Brother and sister, Christopher Buckner and Timothy Savoy, arrested for 'committing incest after watching 'The Notebook''
Robin Williams Emmys tribute led by Billy Crystal criticised for including 'racist' joke about Muslim woman
The Rotherham child abuse scandal is a tale of apologists, misogyny and double standards
Scottish independence TV debate: Pumped-up Alex Salmond bounces back in bruising second round against Alistair Darling
Do you realise just how foolish the UK looks?
Ukip Douglas Carswell defection: Tory MP jumps ship to join Nigel Farage
What do immigrants really think of Britain? Polish immigrant's Reddit post goes viral
- < Previous
- Next >
iJobs Money & Business
£50000 per annum: Harrington Starr: Financial Technical Consultant (C++, C#, F...
£50000 - £80000 per annum + benefits+bonus+package: Harrington Starr: Data Sci...
£450 - £500 per day: Orgtel: SAS Business Analyst, London, Banking, Credit Ris...
£32000 - £38000 Per Annum Bonus, Life Insurance + Other Benefits: Clearwater P...