24th August 2012In this issue:
Industry developments this week
There was widespread reaction to the Department for Transport’s decision to award the West Coast InterCity franchise to FirstGroup over Virgin Trains.
- Virgin Rail, considering judicial review, has pushed for detailed feedback from the government on why it lost. Financial Times
- Meanwhile, FirstGroup’s Tim O’Toole has slammed Richard Branson’s reaction as “hysterical”. Daily Mail
- FirstGroup plans to drop the title ‘First’ from the name of the new West Coast operator, says Transport Briefing, with “Horizon Trains” the rumoured name.
Figures have shown it will not be until March 2022 that FirstGroup’s winning offer returns substantially higher payments to the taxpayer, the Daily Telegraph reports, prompting Public Accounts committee plans for scrutiny.
- The Transport Select committee also said the contract should be delayed until the controversial £13.3bn bid has been scrutinised by MPs. Daily Telegraph
- The Times carries the same story.
- An e-petition urging the government to reconsider changing the operator of the West Coast Mainline rail service has attracted more than 100,000 signatures, which could now lead to a debate in the House of Commons. BBC News
- Tom de Castella asks on BBC News whether anyone will be nostalgic for Virgin Trains. The Sunday Herald also offers a retrospective.
New rail services
None this week.
Brian Souter, chief executive of Stagecoach, has announced he will leave to become the company’s chairman in May 2013. Financial Times
- Investors have raised concerns over the planned move because of worries over his independence. Financial Times
David Cameron is facing a revolt from his own backbenchers over plans to raise the cost of rail commuting by up to 11 per cent, in a vote planned by Labour to exploit Coalition tensions.Daily Telegraph
- In response to the rail fare increase, Private Eye complains there is no great incentive to streamline the industry.
Finance, business and sharecheck
Shares in FirstGroup soared as rumours spread ahead of the official announcement that it had won the West Coast InterCity franchise.
National Express has seen its rail profits fall by 43 per cent following the loss of the East Anglia franchise. Rail.co
- But the transport group said a “reassuringly stable” performance in Spain had helped it maintain steady trading in the period, reports the Financial Times
- Rosie Jacobs in the same paper describes National Express as being “on the right track”.
Shares in Eurotunnel fell almost 6 per cent after the operator of the Channel tunnel said half-year operating profits had sunk in spite of a strong surge in revenues. Financial Times