Nationalise the railways: East Coast train line entering public control

Nationalise the railways: East Coast train line entering public control

Transport Secretary Chris Grayling said the East Coast franchise "is not a failing railway" and Stagecoach and Virgin got their sums wrong.

He added that the firms operating the franchise, which is held under a joint venture between Stagecoach and Virgin owning 90% and 10% respectively, "will have lost almost £200mln" but this had not been a loss to taxpayers "at this time".

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

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.

Perth-based Stagecoach, which has a 90 per cent stake in the franchise, angered MPs by announcing the decision minutes before Mr Grayling made a statement to the House of Commons.

Stagecoach chief executive Martin Griffiths said he was "surprised and disappointed".

Rail services on the East Coast Main Line will be brought back under public control after ministers axed the deal with operator Virgin.

Stagecoach Group said its understanding was that the announcement does not directly affect other franchises and bids for franchises in which the company has an involvement.

"However, we respect the Government's decision".

"Having more stability in the underlying contract between Government and the train company will help achieve these things that matter most to passengers".

"In all circumstances ownership of the infrastructure will remain in the public sector, but the railway is at its strongest when it is a genuine partnership between public and private".

The failure of the current East Coast contract under the pro-privatization Conservative government plays into the hands of the opposition Labour party who have pledged to nationalize industries like rail and water.

He said: 'It's important staff and passengers are properly protected while, once again, the transport secretary tries to patch up a failing franchise system that everyone knows doesn't work.

"Because they can not do it".

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