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Multi-billion pound train line plan stopped in its tracks
12:44pm Friday 5th October 2012 in News
THE Government has scrapped plans to award a multi-billion-pound West Coast Main Line rail franchise – that runs through Crewe – to FirstGroup in a move that will cost tax payers millions of pounds.
Transport Secretary Patrick McLoughlin revealed on Wednesday morning that there were ‘significant technical flaws’ in the bidding process because of mistakes by Department for Transport staff and as a result three civil servants had been suspended.
The estimated cost of reimbursing four companies for the cost of their bids will be £40m.
Crewe station is one of the most important regional hubs on the West Coast Main Line.
Four companies submitted bids 15 months ago – Virgin, FirstGroup, Dutch train operator Nederlandse Spoorwegen, and a joint bid from French companies Keolis and SNCF – but it was First who were deemed to be the winners.
Mr Loughlin said: “A detailed examination by my officials into what happened has revealed these flaws, and means it is no longer acceptable to award a new franchise on the basis of the competition that was held.
“Flaws stem from the way the level of risk in the bids was evaluated.
“Mistakes were made in the way in which inflation and passenger numbers were taken into account and how much money bidders were then asked to guarantee as a result.”
Darrell Matthews, regional director for the Institute of Directors North West, said: “It is shocking that such a crucially important process has gone so seriously wrong.
“Businesses need a stable, reliable rail network and certainty in the provision of key infrastructure.
“Government tendering processes must be whiter than white, or firms will be deterred from applying to take contracts on, which will harm service delivery.
“This uncertainty leaves the future of a key route for the north west in limbo and will no doubt impact our businesses.”
Two reviews have been ordered – one will examine how the West Coast franchise competition went wrong while the other review will look into the wider Department for Transport rail franchise programme.
The suspended staff face possible further disciplinary action pending an investigation
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