East Coast Main Line services under public control from next month


Today Transport Secretary Chris Grayling announced that the East Coast Mainline will be temporarily brought into public ownership after operators Virgin and Stagecoach could no longer meet payments in the £3.3bn contract.

Mr Grayling said at the time it was clear the franchise would only continue in its current form for a "very small number of months" and the option of the Department for Transport stepping in was "very much on the table".

Stagecoach and Virgin admit to overestimating passenger numbers.

The failing East Coast Main Line is being brought back under Government control for the third time in ten years.

Stagecoach and Virgin were supposed to run services on the line until 2013, but the government had previously agreed to let them walk away from the agreement three years early.

Grayling said that the government is willing to take tough decisions when necessary and added: "Mr Speaker, I have also taken official advice about the future of the passports now held by Virgin Holdings and Stagecoach, determining whether they are fit and proper to operate on our railways".

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.

"Deputy leader of City of York Council Andrew Waller said he would be writing to Mr Grayling immediately:to seek assurances and guarantees of stability for residents, commuters and workers in York".

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Chris Grayling, the Transport Secretary, will reveal the Authorities should take again management of companies after Stagecoach and Virgin each didn't run them at a revenue.

Because Britain's privatised rail companies receive massive government subsidies - some £4.8 billion in 2015-16 - even taxpayers who never use trains are effectively subsidising European services.

The service is being renamed London and North Eastern Railway (LNER) after the famous company which ran between 1923 and 1947.

"It is now essential Virgin and Stagecoach are barred from bidding for any future franchises".

There are, however, "more important problems to solve" he said, such as cutting costs on the railways to match continental operations, and reforming the commercial anarchy of train fares.

Labour has accused the Government of giving Stagecoach and Virgin a £2bn "bailout" after they failed on the East Coast mainline, while at the same time awarding them contract extensions on the West Coast.

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