UK's InterCity East Coast franchise to return to public ownership

Virgin Trains East Coast

United Kingdom government will take back control of the running of the rail route between London and Edinburgh from private operator Stagecoach (temporarily) after the company failed to make the contract work financially.

Andy McDonald, the Shadow Transport Secretary, summed this up when he said the East Coast Main Line's best period was "under public ownership, when a billion pounds was returned to the Treasury".

"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.

He said the aim was to create a new public-private partnership from 2020, with "one simple team operating the railway".

Scottish Labour transport spokesman Colin Smyth said: "Just hours before the UK Government confirmed its failed privatisation experiment had come undone, SNP transport minister Humza Yousaf brazenly shrugged his shoulders and said he doesn't even care whether the east coast rail franchise is in public hands or not".

The organisation, which has run the franchise with Virgin Trains since 2015, said it had been advised an "operator of last resort" would be appointed to run the London to Edinburgh service.

GNER, which run the route from 1996, collapsed in 2007 and the franchise was taken over by National Express before the government announced it was establishing a publicly owned company to take over the franchise from 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.

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The future of the services is now uncertain as the Department for Transport, Stagecoach and Virgin are yet to clarify the situation.

"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".

The company and its shareholders are taking pain as a result of forecasts that were too optimistic when Virgin Trains bid for the right to run the franchise.

But whether it will help to make the line viable for the new operator is open to question.

A number of fallacies are being peddled in the wake of the Department for Transport's decision to take direct control of operations on the East Coast Main Line.

The route runs from London to Edinburgh.

He insisted taxpayers had not lost out, adding: "Only Vtec and its parent companies have made losses at this time".

However final 12 months the companies admitted they'd overestimated passenger numbers and suffered a income shortfall, and could be handing it again to the Authorities three years early. "But the organisations have paid a high financial and reputational price for what has happened".

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