Government considers putting Great Northern under public control

In a statement, a Network Rail spokesperson said: "We will continue to work closely with the DfT and rail operators to make sure we continue to offer the best possible service to passengers and freight companies during the transition period and as we move into the new public-private partnership".

"I will terminate Virgin Trains East Coast contract on 24 June 2018", Grayling told lawmakers, adding that the franchise would relaunch as London and North Eastern Railway.

East Coast is now the top-rated franchised train service in Great Britain - with 92 per cent overall satisfaction with the last journey in the latest National Rail Passenger Survey.

He will then appoint an "operator of last resort" to run the train services on the line.

It said yesterday it hoped to continue to play a role in Britain's rail network in the future.

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

LNER will have a new board and an independent chairman, and in a departure from past practice will feature representatives of both the train operating team and state-backed track owner Network Rail Ltd., Grayling said. The stock fell nearly 6 percent when Grayling said in February that the company would be ejected from a franchise originally due to run until 2023 after breaching a key financial covenant.

The Transport Secretary told the Commons taxpayers "had not lost out" after operator, a partnership between Stagecoach and Virgin, "got their bid wrong".

In 2015, the Conservative government privatised Directly Operated Railways, meaning that a franchise collapse, like the one revealed today, would see the service run by a consortium of three companies - Arup Group, Ernst & Young and SNC-Lavalin rail & Transit.

The line that Great Northern operates may come under public control.

Those advocating renationalisation across the piece should be asking themselves whether DOR would have been able to run the service it did had it been obliged to invest as much in the route as did Virgin Trains or if it were having to return as much to taxpayers as Virgin Trains.

He told the Commons that Stagecoach and Virgin have lost nearly £200m, but there had not been a loss to taxpayers "at this time".

Stagecoach continues to be involved in running other United Kingdom rail franchises including the West Coast line between London and Manchester. Under the changes, Stagecoach, which owns 90 per cent of the route, would step down three years early.

After looking into problems with the service, Mr Grayling said he was advised "that there is no suggestion of either malpractice or malicious intent in what has happened".

(Copyright © 2015. All Rights Reserved.)
 
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