Chris Grayling challenged over Virgin and Stagecoach involvement East Cost Rail


In November 2014, Stagecoach and Virgin began ‘Virgin Trains East Coast’, a joint venture (Stagecoach 90% and Virgin 10%) to run trains between London King’s Cross and Edinburgh for eight years. The franchise had agreed to pay the Government £3.3 billion to run the service.

However, just three years into the eight-year franchise, Transport Secretary, Chris Grayling reported that the franchisee will not be expected to continue for more than a few months although they will not rule out Virgin and Stagecoach re-bidding for the East Coast rail franchise. He claimed that despite the contract being terminated early, it was an issue of “not enough success, not of a lack of success” for Virgin Trains East Coast.

Labour’s Paula Sherriff questioned the decision to allow the franchise to re-bid, expressing her opinion that it was “‘Virgin’ on the ridiculous”.

Mr Grayling replied:

“I think you have misunderstood our plans. From 2020 on the East Coast mainline we’re going to do things completely differently. It’s not going to be a current-style bidding process. We’re shaping a public-private partnership. It may be a public-private partnership that brings investment in digital rail, it may have a completely different corporate structure to it. So we’re working through that longer-term plan while preparing to put in place the intermediate arrangements. It’s not a question of who is and is not allowed to bid, we have not even decided what the process is going to be.”

Mr Grayling has also announced further plans for the West Coast Mainline and for HS2 lines. He has declared plans that include proposals that could see a single organisation running trains, tickets and track on the new HS2 service.

He told MPs that companies were being invited to bid to run the new West Coast Partnership, overseeing the introduction of high speed services from 2026, as well as improvements for West Coast passengers:

“The new West Coast Partnership will deliver immediate benefits to passengers and pave the way for the seamless introduction of HS2, with one operator responsible for all aspects of the journey, designed to deliver the best-possible passenger service.

I want HS2 to become a strong British organisation, potentially capable of not just building, but also operating a successful railway – a beacon for other countries to aspire to, both in terms of the engineering project to build it and the service it will offer to passengers, which we will introduce on the West Coast Partnership, he said. Labour said giving the route to private operators risked yet more taxpayer bailouts.”