InterCity West Coast#2012 franchise process

File:Virgin Trains off-peak service map (2013).jpg

{{As of|2017|03}}, these were the services offered:

{{main|Virgin Trains}}

The initial franchise was contested by Sea Containers, Stagecoach and Virgin Rail Group.{{cite magazine |title= Three shortlisted for West Coast |magazine = Rail Magazine | issue= 295 | date= 1 January 1997| page=10}} Each submitted two bids, one based on an all tilting train fleet, and another based on a combination of conventional and tilting trains.{{cite magazine |title= OPRAF receives final bids for West Coast |magazine = Rail Magazine | issue= 298 | date= 12 February 1997| page=7}} On 19 February 1997, the Director of Passenger Rail Franchising awarded a 15-year franchise to Virgin Rail Group, with Virgin Trains commencing operations on 9 March 1997.{{cite news|url=https://www.independent.co.uk/news/business/virgin-pledges-tilt-trains-for-west-coast-1286084.html|title=Virgin pledges tilt trains for West Coast|first=Michael|last=Harrison|date=31 January 1997|work=The Independent|access-date=4 October 2012}}

In order for tilting trains to be operated, Railtrack was committed to upgrade the West Coast Main Line to allow 140 mph operation by 2005. In the wake of the collapse of Railtrack and the inability of its successor Network Rail to deliver the upgrade, the franchise was suspended in favour of a management contract in July 2002.{{cite web |url=https://publications.parliament.uk/pa/cm200203/cmselect/cmtran/125/125ap10.htm |title=Supplementary memorandum by the Strategic Rail Authority |publisher=House of Commons |date=22 July 2002}} After projected costs greatly increased from £2.5 billion to £10 billion, there were cutbacks to the upgrade and the top speed was reduced to 125 mph.{{cite news|url=https://www.telegraph.co.uk/news/1437012/West-Coast-railway-upgrade-under-threat.html|title=West Coast railway upgrade under threat|date=24 July 2003|newspaper=The Telegraph|access-date=31 March 2020}}

File:90015 'The International Brigades' at Carlisle.JPG Class 90 at Carlisle station in August 2004]]

File:Hugh llewelyn 221 104 (6390187711).jpg Class 221 Voyager at Watford Junction station in June 2008]]

During 2011 and 2012 the Department for Transport (DfT) conducted a franchise competition, announced a winner, then cancelled the competition and refunded the costs of bids before any contracts were signed.

With the franchise awarded in 1997 scheduled to end on 31 March 2012, the DfT started the refranchising process in January 2011 by inviting expressions of interest in the Official Journal of the European Union{{cite web|title=Official Journal of the European Union notice for InterCity West Coast franchise |url=http://assets.dft.gov.uk/publications/intercity-west-coast-franchise/ojeunotice.pdf |publisher=Department for Transport |access-date=10 October 2012 |date=11 January 2011 |url-status=dead |archive-url=https://web.archive.org/web/20130606091753/http://assets.dft.gov.uk/publications/intercity-west-coast-franchise/ojeunotice.pdf |archive-date=6 June 2013 }} for a 14-year franchise to run from 1 April 2012 to March 2026. The award of the franchise was stated to be based on the "most economically advantageous tender in terms of the criteria as stated in the specifications".{{cite web|url=http://assets.dft.gov.uk/publications/intercity-west-coast-franchise/ojeunotice.pdf |title=OJEU Notice for the InterCity West Coast Franchise |author=Department for Transport |publisher=Department for Transport |date=11 January 2011 |access-date=8 October 2012 |url-status=dead |archive-url=https://web.archive.org/web/20130606091753/http://assets.dft.gov.uk/publications/intercity-west-coast-franchise/ojeunotice.pdf |archive-date=6 June 2013 }} The franchise was the first to be offered under a new scheme rather than the previous "Cap and Collar" system, which provided for risk-sharing with government regarding future demand. The new scheme was intended to provide greater incentives for cost reduction by operators.{{cite news |url=http://www.railpro.co.uk/magazine/?idArticles=710 |title=Goodbye to the cap-and-collar |first=Robert |last=Wright |newspaper=Rail Professional |date=March 2011 |access-date=3 October 2012}}{{cite web |url=http://www.dft.gov.uk/news/statements/hammond-20110805/ |title=New franchising programme |first=Philip |last=Hammond |author-link=Philip Hammond |date=5 August 2011 |publisher=Department for Transport |access-date=3 October 2012}} Because of the increased future risks carried by operators under the new scheme, the government required a large financial surety to discourage early contract default.{{cite news |url=http://www.ft.com/cms/s/0/8eabf2fa-0d87-11e2-97a1-00144feabdc0.html |title=How franchise hit the buffers |first1=Mark|last1=Odell|first2=Rose|last2=Jacobs |newspaper=Financial Times|location=London |date=3 October 2012 |access-date=5 October 2012}}

In March 2011, the DfT shortlisted Abellio, FirstGroup, Keolis/SNCF and Virgin Rail Group to bid for the franchise, which would run for up to 15 years.{{cite press release|url=http://assets.dft.gov.uk/publications/intercity-west-coast-franchise/franchisebidders.pdf |title=Shortlisted Bidders for Greater Anglia and Intercity West Coast Rail Franchises |publisher=Department for Transport |date=24 March 2011 |access-date=29 September 2012 |url-status=dead |archive-url=https://web.archive.org/web/20130606094818/http://assets.dft.gov.uk/publications/intercity-west-coast-franchise/franchisebidders.pdf |archive-date=6 June 2013 }} In May 2011, a Draft Invitation to Tender was issued to the shortlisted bidders, which stated the franchise start date had been postponed until 9 December 2012.{{cite web|title=Draft Invitation to Tender for the InterCity West Coast franchise|url=http://assets.dft.gov.uk/publications/intercity-west-coast-franchise/draft-invitation-to-tender-tender-invitation-document.pdf|publisher=Department for Transport|access-date=10 October 2012|date=19 May 2011}} In October 2011, the DfT announced that Virgin had been granted a franchise extension until 8 December 2012,{{cite press release|url=http://www.dft.gov.uk/news/press-releases/dft-press-20111027b/|title=West Coast passengers in line for 28,000 extra seats as franchise extension signed|publisher=Department for Transport|date=27 October 2011|access-date=4 October 2012}} and in January 2012 issued the Final Invitation to Tender to the shortlisted bidders.{{cite web|title=Invitation to Tender for the InterCity West Coast franchise|url=http://assets.dft.gov.uk/publications/intercity-west-coast-franchise-itt/invitation-to-tender-main-document.pdf|publisher=Department for Transport|date=20 January 2012}} On 15 August 2012, the DfT announced FirstGroup as the successful bidder for the franchise,{{cite press release|title=New operator for West Coast rail passengers|url=http://www.dft.gov.uk/news/press-releases/dft-press-20120815a|publisher=Department for Transport|access-date=15 August 2012}} promising 11 new six-carriage electric trains, direct services to Blackpool in 2013, and to Telford, {{rws|Shrewsbury}} and {{rws|Bolton}} in 2016.{{cite report|format=presentation|url=http://www.firstgroup.com/assets/pdfs/investors/presentations/InterCity_West_Coast_franchise_award_presentation_150812.pdf|publisher=FirstGroup plc|work=Intercity West Coast rail franchise award|date=15 August 2012|access-date=8 October 2012|page=8|title=Delivering real and tangible benefits for customers|first=Flora|last=Merton}}

On 10 August 2012 a report commissioned by Virgin Rail Group, detailing concerns with the franchising evaluation process, was handed to the DfT.{{cite news|url=https://www.telegraph.co.uk/finance/newsbysector/transport/9588164/Europa-report-alerted-Government-to-West-Coast-flaws.html|title=Europa report alerted Government to West Coast flaws|newspaper=The Daily Telegraph|first=Alistair|last=Osborne|date=4 October 2012|access-date=7 October 2012}}{{cite news|url=http://www.channel4.com/news/how-an-illegal-process-sunk-the-governments-rail-strategy|title=How a flawed process sank the government's rail strategy|publisher=Channel 4 News|first=Faisal|last=Islam|author-link=Faisal Islam}}{{cite news|url=http://www.theweek.co.uk/companies/49416/department-transport-was-warned-over-main-line-contract|title=Department for Transport was warned over Main Line contract|newspaper=The Week|date=5 October 2012|access-date=7 October 2012}}

An e-petition was created to urge the government to reconsider its decision and to debate the bids in the House of Commons. The petition was set up independently, but backed by Virgin, and attracted large support, gaining 50,000 signatures within two days. The 100,000 signatures required for the petition to be considered for debate in Parliament was exceeded. The matter was debated in Westminster Hall on 17 September 2012.{{cite web|url=http://www.parliamentlive.tv/Main/Player.aspx?meetingId=11421|title=E-petition relating to the West Coast Mainline franchise decision|publisher=Parliament of the United Kingdom|work=Westminster Hall Archive|date=17 September 2012|access-date=29 September 2012|format=video recording}}

Following the public's response to Virgin's loss of the franchise, Louise Ellman, Chair of the Transport Select Committee, wrote to the then Secretary of State for Transport, Justine Greening, asking her to delay the signing of the new contract until the committee had a chance to explore the matter.{{cite web|url=http://www.parliament.uk/documents/commons-committees/transport/12-08-23%20-%20Chair%20to%20Justine%20Greening%20-%20WC%20Franchise.pdf|title=From Mrs Louise Ellman MP, Chair|author1=Transport Select Committee|author-link1=Transport Select Committee|first2=Louise|last2=Ellman|author-link2=Louise Ellman|date=23 August 2012|access-date=29 September 2012|publisher=Parliament of the United Kingdom|format=letter to Justine Greening}} Virgin had offered to run the line on a 'not for profit' basis while this took place.{{cite news|url=https://www.bbc.co.uk/news/business-19386005|title=Virgin Trains offers to run West Coast 'for free'|date=26 August 2012|access-date=29 September 2012|publisher=BBC News}} Despite public and political pressure for an independent review of the deal, the DfT declared it would not delay the signing of the contract once the ten-day standstill period had expired. On 28 August, Virgin Trains announced it would seek a judicial review of the franchise decision, preventing the contract being signed, claiming civil servants had "got their maths wrong with FirstGroup". The DfT responded, stating that they were confident the selection process was robust.{{cite news |url=https://www.bbc.co.uk/news/uk-19402133 |title=Virgin Trains takes West Coast Main Line court action |publisher=BBC |date=28 August 2012 |access-date=4 October 2012}}{{cite news |url=https://www.theguardian.com/business/2012/aug/28/virgin-trains-legal-challenge-franchise |title=Rail and air transport policy left in chaos |work=The Guardian |first1=Dan |last1=Milmo|first2=Gwyn |last2=Topham| first3=Nicholas |last3=Watt |date=28 August 2012 |access-date=29 September 2012}} In September 2012, the DfT began making arrangements for the franchise to pass temporarily to West Coast Main Line Limited, a subsidiary of Directly Operated Railways, in the event that a judicial review was granted.{{cite news|url=https://www.telegraph.co.uk/finance/newsbysector/transport/9548956/Government-team-in-place-to-run-West-Coast-Main-Line.html|title=Government team in place to run West Coast Main Line|newspaper=The Daily Telegraph|date=18 September 2012|access-date=29 September 2012|first=David|last=Millward}}{{cite report|url=http://data.companieshouse.gov.uk/doc/company/04659516|title=West Coast Main Line Company Limited 04659516|access-date=29 September 2012|publisher=Companies House}}

On 3 October 2012, the government announced it was cancelling the franchise competition after discovering significant technical flaws in the bidding process, thus cancelling the decision to award it to FirstGroup. It was stated that civil servants had made significant mistakes in the way in which the risks for each bid had been calculated,{{cite press release|url=http://www.dft.gov.uk/news/press-releases/dft-press-20121003a|title=West Coast Main Line franchise competition cancelled|date=3 October 2012|publisher=Department for Transport|access-date=3 October 2012}} leading to too little default surety being required of bidders.

Two independent inquiries were announced; one to investigate the failed competition, led by Sam Laidlaw of Centrica, with Ed Smith, both on the Board of the DfT; and the second led by Richard Brown of Eurostar, to investigate the wider franchise system.{{cite news|url=https://www.telegraph.co.uk/finance/newsbysector/transport/9583189/Government-cancels-West-Coast-Mainline-contract-due-to-flaws-in-bidding-process.html|title=Government cancels West Coast Mainline contract due to 'flaws' in bidding process|first=Andrew|last=Trotman|date=3 October 2012|access-date=3 October 2012|newspaper=The Daily Telegraph|location=London}} Three civil servants were suspended.{{cn|date=July 2020}}

During September 2012 the newly appointed Secretary of State for Transport, Patrick McLoughlin, had been warned of potential issues. On 2 October, he decided to cancel the franchise award.{{cite news|url=https://www.bbc.co.uk/news/uk-19817798|title=West Coast Main Line franchise process a 'fiasco' says Branson|publisher=BBC News|date=3 October 2012|access-date=4 October 2012}}{{cite news|url=https://www.telegraph.co.uk/finance/newsbysector/transport/9591525/West-Coast-Main-Line-scrapped-bid-reveals-chaos-at-the-heart-of-government.html|title=West Coast Main Line: scrapped bid reveals chaos at the heart of government|newspaper=The Independent|first=Alistair|last=Osborne|date=6 October 2012|access-date=7 October 2012}} The DfT had been due in the High Court on 3 October 2012 to respond to a judicial review sought by Virgin Rail Group.

On 5 October 2012, one of the three suspended civil servants, Kate Mingay, released a statement to correct the reporting of her role in the franchising process.{{cite news|url=https://www.theguardian.com/politics/2012/oct/05/west-coast-civil-servant-transport|title=West coast mainline row: civil servant hits out at Department for Transport|newspaper=The Guardian|first=Gwyn|last=Topham|date=5 October 2012|access-date=6 October 2012}} She began legal proceedings against the DfT over her suspension, with a High Court hearing on 29 November 2012 rejecting her claim to have her suspension lifted.{{cite news|url=https://www.telegraph.co.uk/finance/newsbysector/transport/9713026/West-Coast-rail-Kate-Mingay-accuses-Government-of-making-her-a-public-sacrifice.html| title= West Coast rail: Kate Mingay accuses Government of making her a 'public sacrifice'| newspaper=The Telegraph| first=Alistair| last=Osbourne|date=29 November 2012| access-date=30 November 2012}} It was announced on 6 December 2012 that all three of the suspended civil servants, including Mingay, would return to work.{{cite news|url=https://www.bbc.co.uk/news/uk-20620787| title= West Coast Mainline deal failure criticised| publisher=BBC News|date=6 December 2012| access-date=6 December 2012}}

The government decided it would reimburse the four bidders for all costs incurred. This amounted to £39.7 million with a further £4.9 million paid to FirstGroup as reimbursement for mobilisation costs incurred.[https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/209980/annual-report-and-accounts-2012-2013.pdf Annual Report 31 March 2013 page 186] Department for Transport

The Laidlaw report was published in December 2012, and found the DfT to be primarily responsible for the failure of the West Coast competition, having made several errors in its financial modelling.{{Cite web|url=https://www.gov.uk/government/news/west-coast-main-line-final-report-of-the-laidlaw-inquiry|title=West Coast Main Line: final report of the Laidlaw inquiry|date=6 December 2012|website=GOV.UK|language=en|access-date=12 February 2018}} The Brown report, published in January 2013, found no fundamental flaws in the bidding process but made recommendations for improvements.{{Cite web|url=https://www.gov.uk/government/publications/the-brown-review-of-the-rail-franchising-programme|title=The Brown review of the rail franchising programme|date=10 January 2013|website=GOV.UK|language=en|access-date=12 February 2018}}

In October 2012, the DfT announced that Virgin Trains would continue to operate the franchise for between 9 and 13 months until a short-term interim franchise competition for the West Coast could be rerun.{{cite news|url=https://www.bbc.co.uk/news/uk-19944782|title=Virgin in talks on West Coast route contract extension|publisher=BBC News|date=15 October 2012|access-date=15 October 2012}}{{cite news|url=http://www.ft.com/cms/s/0/4e235744-1626-11e2-b6f1-00144feabdc0.html|title=Virgin set for West Coast extension|work=Financial Times|location=London|first1=Mark|last1=Odell|first2=George|last2=Parker|date=15 October 2012|access-date=15 October 2012}}{{cite press release|url=http://www.dft.gov.uk/news/press-releases/press-dft-20121015a/|title=Department for Transport to negotiate with Virgin on temporary operation of West Coast rail services|date=15 October 2012|access-date=15 October 2012}} In December 2012, Virgin was awarded a 23-month management contract until November 2014.[https://www.telegraph.co.uk/finance/newsbysector/transport/9725897/Two-year-extension-for-Virgin-Rail-after-West-Coast-chaos.html Two-year extension for Virgin Rail after West Coast chaos] The Telegraph 5 December 2012

In March 2013 the Secretary of State for Transport announced negotiations with Virgin to extend the franchise until 31 March 2017;[https://www.gov.uk/government/speeches/franchise-announcement "Railway plan puts new focus on passengers"] Secretary of State for Transport statement 26 March 2013 these were concluded in June 2014.[https://www.independent.co.uk/news/business/news/virgin-trains-profits-gather-speed-as-west-coast-contract-is-extended-9547815.html Virgin Trains profits gather speed as West Coast contract is extended] The Independent 19 June 2014 In 2016 the franchise was again extended{{cite web|url=http://www.railtechnologymagazine.com/Rail-News/major-franchise-combines-wcml-services-with-hs2-in-seamless-integration|title=Franchise combines WCML services with HS2 in 'seamless integration'|date=4 November 2016|website=Rail Technology Magazine|access-date=12 February 2018}} and in 2018 there was a further extension to March 2019, with an option for up to an additional year.{{Cite news|url=http://www.railwaygazette.com/news/passenger/single-view/view/virgin-trains-directly-awarded-new-intercity-west-coast-franchise.html|title=Virgin Trains directly awarded new InterCity West Coast franchise|date=6 February 2018|work=Railway Gazette|access-date=12 February 2018|language=en}}{{Cite web|url=https://hansard.parliament.uk/debates/GetDebateAsText/228EB6B2-2FD1-40AB-87C0-D6AEDA785DE5|title=Rail Update – Chris Grayling|date=5 February 2018|website=Hansard|access-date=12 February 2018}} This option was taken up by the DfT in December 2018, thereby extending the contract for a period potentially up to March 2020.{{Cite web|url=https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/SGC/13913897.html|title=Virgin Rail Group West Coast rail franchise|date=21 December 2018|website=RNS – London Stock Exchange|access-date=25 December 2018}}{{Cite news|title=Outrage as Grayling awards Virgin rail franchise extension|last1=Malnick|first1=Edward|date=23 December 2018|work=The Sunday Telegraph|last2=Morley|first2=Katie}}

In November 2016, the government announced that the InterCity West Coast franchise would be replaced by the West Coast Partnership. Avanti West Coast commenced operating the franchise on 9 December 2019.[https://www.bbc.com/news/business-49341772 FirstGroup replaces Virgin to run West Coast route] BBC News 14 August 2019{{cite magazine |title= Avanti West Coast launches |magazine = Railways Illustrated | issue= February 2020| page=6}}

{{Reflist}}

• {{cite magazine|title=Interim West Coast collapse report barely scratches the surface|first=Philip|last=Haigh|magazine=Rail|pages=36–37|issue=710|date=28 November – 11 December 2012|location=Peterborough|publisher=Bauer|issn=0953-4563|oclc=49953699}}

{{Rail franchises in Great Britain|state=collapsed}}

Category:Railway franchises in the United Kingdom