MPs on the public accounts committee pointed out yesterday that the original competition cost £1.9m, but the DfT has so far spent a “mind-blowing” £2.7m on preparing to defend its decision in court and £4.3m on subsequent advice, including the Laidlaw report into the DfT’s shortcomings.
“It’s a prime example of how one can be penny wise and pound foolish,” conceded permanent secretary Philip Rutnam.
The DfT scrapped a decision to award FirstGroup the right to run the West Coast Main Line in October, blaming “serious flaws” in the way the bids were judged.
“I can’t say that there won’t be [further costs],” Rutnam said. The DfT has so far pledged to reimburse £40m spent by the bidders.