Virgin Rail faces setback on £1bn Pendolino trains

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Virgin Rail has been forced to scrap plans to introduce its £1bn fleet of Pendolino tilting trains on London to Manchester services in time for the Commonwealth Games.

The setback came as Stagecoach, which owns 49 per cent of Virgin Rail, disclosed that Railtrack has paid out £90m in compensation because of delays to the upgrade of the west coast mainline. The payment, in the form of a deferral of track access charges, is part of a compensation package expected to be worth up to £400m.

Virgin, which will unveil the first fully kitted out Pendolino at a ceremony today at Euston station, had planned to begin a London-Manchester service before the Games begin on 25 July. But a spokesman said the introduction of the service had now been delayed until late summer or early autumn.

Instead, there will be a limited service on part of the west coast line starting in early June for passengers who wanted to sample what the future of inter-city rail services will look and feel like.

The Pendolino being unveiled today at Euston by the Transport minister John Spellar, the Virgin chairman Sir Richard Branson and the Stagecoach chairman Brian Souter, will feature in-seat audio entertainment systems and power points for passengers to plug their laptops into.

The trains also have self-service shops selling food, drink, books and CDs and facilities for the disabled. Passengers will be able to board the train and look around carriages.

Subsidies for the west coast mainline will decline by £70m this year, meaning that Virgin Rail will for the first time start making a net payment to the Government for the right to operate the franchise. Stagecoach said the future success of Virgin Rail depended on achieving "significant" revenue growth and, for this reason, it was "essential" that a satisfactory early conclusion was reached over the amended upgrade to the west coast line. A 125 mph service, cutting the London-Manchester journey time to 2 hours, will not be possible until autumn, 2003.