East Coast put on the block in rail overhaul

 
Marion Dakers
THE EAST Coast train route will be privatised in February 2015, the transport secretary Patrick McLoughlin confirmed yesterday, as part of a new timetable for all UK rail franchises.

The London to Inverness service, which has been part of the public sector since 2009, is expected to attract bidders including FirstGroup and Virgin Trains.

McLoughlin has also set out his department’s plans to overhaul the franchising system, following the botched West Coast contest that was scrapped in October.

Franchise competitions will now be staggered, with no more than four a year, to avoid overwork at the Department for Transport.

The new schedule means incumbent operators will be handed extensions of up to 50 months.

Virgin, which challenged the government’s West Coast decision last year, will operate that route until April 2017 while the competition is rerun, McLoughlin confirmed.

As part of the shake-up Richard Brown, who authored a report on the failings of the previous franchise system, will chair an advisory board.

The overhaul was made a day before the 50th anniversary of the Beeching report, which led to the closure of over a quarter of Britain’s railways.

Shares in Go-Ahead, FirstGroup, Stagecoach and National Express closed slightly lower yesterday.

“We anticipate the short-term implications for the four quoted operators to be relatively modest. There will be some upward pressure on earnings estimates and valuations as the [franchise] extensions are incorporated into forecasts,” said Espirito Santo.