Branson’s West Coast rail dream turns nightmare as UK government mulls takover
Skift Take
First Virgin lost its bid to First Group, then the bid was thrown out, then Branson rejoiced. Now the UK government is considering taking over -- as it did the east coast line -- and, as a result, likely improving customer satisfaction and on-time rates.
Richard Branson’s U.K. rail business faces a fresh threat as the government considers taking over the West Coast route a week after halting its transfer to FirstGroup Plc following the discovery of flaws in the bidding process.
Allowing Branson to keep the route pending a new contest once the current contract expires on Dec. 9 could be legally problematic, Transport Minister Norman Baker said. The other option would be to assign the line to Directly Operated Railways Ltd., set up by the government in 2009 to run failed franchises.
“Both are still being evaluated,” Baker said in an interview in London. “The issue is that the franchise will have expired. Can Virgin continue under the present arrangement, or should the state come in with the existing operation that runs the East Coast mainline and deal with the West Coast as well?”
Transport Secretary Patrick McLoughlin will make his plans known to Parliament on Oct. 15. Plumping for the nationalization option would “
