Leading article: Rail contracts are on the wrong track


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The Independent Online

It is easy to dismiss the lamentations of Sir Richard Branson as sour grapes. After all, his rail company spent almost £14m trying to hold on to its West Coast Main Line franchise, only to see it handed to rival FirstGroup. With the future of Virgin Trains now in question, it is perhaps not surprising to hear Sir Richard pouring scorn on the winning bid.

He is not the only sceptic, however. Where Virgin offered to pay £4.8bn to run the line, FirstGroup bid £5.5bn, based on predictions of soaring revenue growth considered impossibly optimistic not just by Sir Richard but by several independent industry experts.

Given the significant hit to the public purse if FirstGroup's numbers do not stack up, the Government's decision is certainly a risky one. More broadly, a franchising system which stacks the odds in favour of companies that over-promise surely needs a rethink.