Stagecoach and Virgin succeed in bid to run east coast mainline

Tuesday 2nd December 2014

On 27 November 2014, it was announced that a consortium between Stagecoach and Virgin, known as ‘Inter City Railways’, are to pay the Treasury £3.3bn to run the East Coast mainline.  They have also reportedly committed to invest £140m in both trains and stations, promising to reduce travel times from Edinburgh to London by 13 minutes and Leeds to London by 14 minutes, as well as creating direct lines to the capital from Huddersfield, Sunderland, Middlesbrough, Dewsbury and Thornaby.

The group will take charge of the franchise on 1 March 2015 and plan to hold it until 2023.

The consortium hopes to add an extra 12,200 seats (50% more) by 2020 and claim they will reduce standard anytime fares by 10%.  Rail Minister, Claire Perry, noted that nine out of ten passengers using the route can choose whether to drive or travel by train, so a competitive railway must have “decent pricing and give people value for money.”

Inter City Railways plan to develop their own website and smartphone app to keep up with technology and meet their aim to make travel easier for customers.

Martin Griffiths, chief executive of Stagecoach Group, said “We have some fantastic ideas to deliver a more personal travel experience for customers. Investing in the committed people who will make that happen is a big part of our plans, giving opportunities for them to develop and grow into more senior roles. At the same time, we have developed major programmes to help young people, communities and small businesses along what is one of Britain’s major rail routes.”

However, the decision to award the franchise to Inter City Railways caused some raised eyebrows because Stagecoach and Virgin’s other joint venture, Virgin Rail, runs the West Coast Mainline between Glasgow and London.  The new consortium claims that the East and West Coast services do not compete with each other.  This seems to contradict what Patrick McLoughlin, Transport Secretary, said in the tender prospectus: “We want to see a revitalised East Coast railway; one that rekindles the spirit of competition for customers on this great route to Scotland and compete with the West Coast on speed, quality and customer service.”

Despite this, Mr McLoughlin has now acknowledged that “This is a fantastic deal for passengers and for staff on this vital route. It gives passengers more seats, more services and new trains.  We are putting passengers at the heart of the service. I believe Stagecoach and Virgin will not only deliver for customers but also for the British taxpayer.”

Will Inter City Railways succeed in creating faster, more reliable rail travel with cheaper fares or will it hit the buffers?  Watch this space.

Sky News – East Coast Rail Winner Makes Service Pledge

FT – Stagecoach secures East Coast rail franchise