East Coast rail line returns to private hands after Virgin Trains and Stagecoach bid to end public ownership

Adam Hignett
Virgin and Stagecoach will run Virgin Trains East Coast
The East Coast mainline returned to private hands yesterday following last November’s successful bid by Virgin Trains and Stagecoach to operate the line after five years of public ownership.

The £3.3bn contract, which sees the consortium branded Virgin Trains East Coast running the line for the next eight years, has divided political opinion along party lines, with shadow transport secretary Michael Dugher labelling the deal “a hammer blow for passengers, taxpayers and employees alike.”

The contract was defended by the government, however, which stressed an obligation by the firms to reinvest £140m into the network, with plans to add an extra 23 new services to and from London and increase seating capacity during peak times by over 3,000 by 2020.

The deal comes after five years of public ownership following National Express’s abandonment of the franchise in 2009.

The franchise was then operated directly by the Department for Transport, giving a return of £1bn for the Treasury during this period­ – less on a per annum basis than the upfront £3.3bn spread over eight years. After the deal was awarded, the consortium was asked to give promises regarding competition issues.

Despite government claims that the main beneficiaries of the deal will be the public, opinion polls consistently show the public remaining sceptical about private franchises.

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