East Coast rail route through Notts brought back under public control

Exclusive: Government to 'renationalise' East Coast rail after string of failures

Stagecoach said it and Virgin had been negotiating for a new contract with the Department for Transport but that it understood Mr Grayling was "no longer considering" them for the deal.

Virgin Trains East Coast- a joint venture between Stagecoach and Virgin- had won the right to operate the franchise between London and Edinburgh for eight years in 2014.

In February Grayling admitted the beleaguered East Coast mainline rail franchise had collapsed.

Services had been run by the DfT for six years up to VTEC taking over in 2015.

Grayling said that the scrapping of the contract did not mean that government had lost out, because East Coast had already delivered 1 billion pounds to the public purse, and continued to generate returns, plus passenger satisfaction was high.

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.

He expected the majority of the enhanced services planned by Virgin and Stagecoach for delivery by 2023 to be implemented by LNER, although this would largely depend on the ability of infrastructure manager Network Rail to deliver them.


It said on Wednesday it hoped to continue to play a role in Britain's rail network in the future, and continues to be involved in running other United Kingdom rail franchises including the West Coast line between London and Manchester. "Virgin and Stagecoach have managed reverse alchemy - by turning gold into base metal, and profits into losses on the east coast".

United Kingdom government will take back control of the running of the rail route between London and Edinburgh from private operator Stagecoach (temporarily) after the company failed to make the contract work financially.

Stagecoach and Virgin Trains got their bid wrong and they are now paying the price.

The government is set to renationalise the East Coast mainline, one of Britain's busiest railway lines.

Because Stagecoach and Virgin are escaping some of their scheduled payments, critics said halting the franchise early amounted to "a bail-out" by the taxpayer of the private sector operators. After the effects of the Network Grant had been taken into account, Virgin Trains East Coast yielded £20.8 million for the Treasury. Grayling said that while there'll be no nationalization, East Coast will be recast as a partnership between public and private sectors.

Stagecoach chief executive Martin Griffiths said he was "surprised and disappointed".

He said: "I have to say I don't have a preference for either in the sense that my main concern is the service, that there is no diminution in the service for Scottish passengers, and indeed that there is not an additional cost to the taxpayer for that".

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