Major UK train line RENATIONALISED as Virgin loses deal

Clay Curtis
May 16, 2018

The East Coast main line is to be brought back under public control in what will be the third time in a decade that the United Kingdom government has called a halt to the franchise.

The London to Edinburgh line has been run by a joint venture between Stagecoach and Virgin, for the last three years.

East Coast staff will transfer to a new company, London and North Eastern Railway or LNER, which will initially be overseen by "last resort" advisers comprising engineering firm Arup Group and accountants Ernst & Young, recruited earlier as potential emergency operators for failed franchises.

Transport secretary Chris Grayling is expected to announce the fate of the East Coast rail franchise "within days".

But Stagecoach reported losses on the line and in November previous year Grayling announced that the franchise would be terminated in 2020 and become a public-private railway.

It will now be run by the Department for Transport (DfT) through an operator of last resort (OLR).

Labour described the decision to end the £3.3 billion contract as a "bailout".

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The troubled East Coast rail service is to be renationalised after current operators Stagecoach and Virgin could not meet payments.

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But now the Financial Times reports that Grayling may be considering scrapping the franchise, which would be the third time in less than a decade that the government has been forced to act on the contract.

"We believe our plans offered a positive, value-for-money way forward for passengers, taxpayers and local communities, ensuring the continuation of the exciting transformation already underway on East Coast and a smooth transition to the Government's new East Coast Partnership".

He added: "However, we respect the Government's decision".

The company said it "had been negotiating a new direct award franchise with the UK Department for Transport but we understand the Secretary of State for Transport is no longer considering entering into a new franchise" with it.

Stagecoach pledged to "work constructively with the officials and the OLR in the weeks ahead to ensure a "professional transfer to the new arrangements".

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