Published: Wed, May 16, 2018
Worldwide | By Gretchen Simon

East Coast main line trains back in public hands next month

East Coast main line trains back in public hands next month

The service is being brought back into public ownership after a string of failures by Stagecoach and Virgin in recent years.

The Stagecoach-dominated firm will be replaced by a public sector "operator of last resort" which will revive the historic name London North Eastern Railway (LNER).

The company also has already funded its full GBP165 million loan commitment to the East Coast franchise.

Perth-based Stagecoach said: "We have now been advised by the Department for Transport that the Secretary of State for Transport plans to announce today that he intends to appoint the "operator of last resort" (OLR) to operate the InterCity East Coast trains services".

Shadow Transport Secretary Andy McDonald accused Mr Grayling of treating the opposition and the Commons with contempt after withholding his statement until half an hour before he delivered it.

The public transport operator said the UK Department for Transport has chose to appoint "Operator of Last Resort" for the East Coast train service and is "no longer considering" entering into a new franchise contract due to heavy losses incurred by Stagecoach and Virgin.

He said: " I am creating a new board with an independent chair to oversee the operation of the LNER route and work with my Department on building the new partnership.

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

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He said: "Every announcement is a smokescreen to divert attention from the failings of the Transport Secretary's policy".

"This is the second time that the Government have called upon the public sector to launch a rescue operation on the East Coast Main Line and instead of being a temporary arrangement Chris Grayling should listen to his staff and the public and make it permanent".

"Anything else risks playing out the same expensive farce over and over again".

He expected the majority of the enhanced services planned by Virgin and Stagecoach for delivery by 2023 to be implemented by LNER, although this would largely depend on the ability of infrastructure manager Network Rail to deliver them.

In February Mr Grayling said the franchise would only be able to continue in its current form for a "very small number of months" as Stagecoach had "got its numbers wrong" and "overbid".

But Stagecoach reported losses on the line and in November past year Mr Grayling announced that the franchise would be terminated in 2020 to enable it to become a public-private railway.

A Virgin Train on the East Coast Main Line.

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