Published: Wed, May 16, 2018
Markets | By Otis Pena

Scotland-London rail services to be brought under public control

Scotland-London rail services to be brought under public control

According to the Guardian, Grayling is deciding whether to renationalise the rail line between London and Edinburgh or negotiate a not-for-profit arrangement with current franchisees Stagecoach and Virgin Trains.

Trains will be run by the Department for Transport through an operator of last resort.

Transport secretary Chris Grayling is expected to announce the fate of the East Coast rail franchise "within days".

While Grayling said there will be no sanctions against Virgin or Stagecoach for their failures, Labour and unions described the decision to end the £3.3bn contract as a "bailout".

"The team that's been working for me since last autumn to form the Operator of Last Resort will take immediate control of passenger services".

The transport secretary, Chris Grayling, told the House of Commons that after a "finely balanced" assessment by civil servants, he had chose to appoint the "operator of last resort" - a group led by the firm Arup and under government control - to run the service, rather than allow Stagecoach and Virgin to continue under fresh terms.

'They will then begin the task of working with Network Rail to bring together the teams operating the track and trains on the LNER network'.

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GNER was stripped of the route in 2007 after its parent company suffered financial difficulties, while National Express withdrew in 2009.

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

Stagecoach's chief executive Martin Griffiths estimated the company's total losses at £260m, in February.

At the time, Virgin Group owner Sir Richard Branson said the partnership's bid for the franchise was "based on a number of key assumptions and a promise of a huge upgrade of the infrastructure by Network Rail", which faced delays.

A Great Northern spokesman told the Comet in response: "The government brought together Great Northern and Thameslink with Southern and Gatwick Express with a goal and that was to modernise and introduce a new, expanded Thameslink network - which is what we will be doing from Sunday".

Mr Grayling told the Commons: 'I will terminate Virgin Trains East Coast's contract on June 24 2018.

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