InterCity West Coast - InterCity West Coast 2012 Franchise Process - B

InterCity West Coast - B

InterCity West Coast 2012 Franchise Process

During 2011 and 2012 the Department for Transport (DfT) conducted a franchise competition, announced a winner, then cancelled the competition and refunded the costs of bids before any contracts were signed.

InterCity West Coast Bidding Competition

With the franchise awarded in 1997 scheduled to end on 31 March 2012, the DfT started the refranchising process in January 2011 by inviting expressions of interest in the Official Journal of the European Union for a 14-year franchise to run from 1 April 2012 to March 2026. The award of the franchise was stated to be based on the "most economically advantageous tender in terms of the criteria as stated in the specifications".

The franchise was the first to be offered under a new scheme rather than the previous "Cap and Collar" system, which provided for risk-sharing with government regarding future demand. The new scheme was intended to provide greater incentives for cost reduction by operators. Because of the increased future risks carried by operators under the new scheme, the government required a large financial surety to discourage early contract default.

In March 2011, the DfT shortlisted Abellio, FirstGroup, Keolis/SNCF and Virgin Rail Group to bid for the franchise, which would run for up to 15 years. In May 2011, a Draft Invitation to Tender was issued to the shortlisted bidders, which stated the franchise start date had been postponed until 9 December 2012.

In October 2011, the DfT announced that Virgin had been granted a franchise extension until 8 December 2012, and in January 2012 issued the Final Invitation to Tender to the shortlisted bidders. On 15 August 2012, the DfT announced FirstGroup as the successful bidder for the franchise, promising 11 new six-carriage electric trains, direct services to Blackpool in 2013, and to Telford, Shrewsbury and Bolton in 2016.

InterCity West Coast Challenge

On 10 August 2012 a report commissioned by Virgin Rail Group, detailing concerns with the franchising evaluation process, was handed to the DfT.

An e-petition was created to urge the government to reconsider its decision and to debate the bids in the House of Commons. The petition was set up independently, but backed by Virgin, and attracted large support, gaining 50,000 signatures within two days. The 100,000 signatures required for the petition to be considered for debate in Parliament was exceeded. The matter was debated in Westminster Hall on 17 September 2012.

Following the public's response to Virgin's loss of the franchise, Louise Ellman, Chair of the Transport Select Committee, wrote to the then Secretary of State for Transport, Justine Greening, asking her to delay the signing of the new contract until the committee had a chance to explore the matter. Virgin had offered to run the line on a 'not for profit' basis while this took place.

Despite public and political pressure for an independent review of the deal, the DfT declared it would not delay the signing of the contract once the ten-day standstill period had expired. On 28 August, Virgin Trains announced it would seek a judicial review of the franchise decision, preventing the contract being signed, claiming civil servants had "got their maths wrong with FirstGroup". The DfT responded, stating that they were confident the selection process was robust.

In September 2012, the DfT began making arrangements for the franchise to pass temporarily to West Coast Main Line Limited, a subsidiary of Directly Operated Railways, in the event that a judicial review was granted.

InterCity West Coast

InterCity West Coast Current Operator: Avanti West Coast

InterCity West Coast Main Route(s): West Coast Main Line

InterCity West Coast Stations Called At: 44

InterCity West Coast Stations Operated: 17

InterCity West Coast Dates of Operation: 9 March 1997 - 7 December 2019

InterCity West Coast Track Gauge: 1,435 mm (4 ft 8+1⁄2 in)

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