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Rail Franchise

Volume 454: debated on Wednesday 13 December 2006

I am today announcing the reinstatement of a franchise agreement with Virgin Rail Group to operate Intercity services on the west coast main line. The train-operating company running services on the route will continue to be Virgin West Coast.

The original franchise agreement with Virgin Rail Group provided for the operation of services between Scotland, the North-West, the Midlands and London Euston between 1997 and 2012.

The agreement was predicated on the assumption that Railtrack would deliver their contractual commitments outlined in the west coast main line route modernisation programme by 2005. In response to Railtrack’s failure to deliver the agreed terms of the modernisation programme a ‘letter agreement’ was put into place with Virgin West Coast in 2002.

The letter agreement provided for the unique circumstances that prevented the franchise agreement from being implemented. It allowed the Government to secure continued passenger services whilst the modernisation project could be rescued.

The reinstatement of the franchise agreement is the last stage in the overall programme of modernisation of the west coast main line. It puts our agreement with Virgin West Coast back on a secure contractual footing and has allowed my Department to secure additional public value. It incentivises the operator to reduce costs and has provided a good deal for the taxpayer and the fare-payer.

The franchise agreement contractualises services improvements outlined in the west coast main line progress report published in May 2006. At the introduction of a new timetable in December 2008 there will be a significant increase in rail services between major cities and faster journeys. Services between London and Manchester and London and Birmingham will operate at 20 minute intervals all day.

London-Scotland journey times will be farther reduced by 30 minutes, so that by 2008 the journey between London and Glasgow will take four and a half hours. There will be hourly services all day between London and Liverpool, London and Preston and London and Chester.

The agreement also transfers services between Birmingham and Scotland, currently operated by Virgin Cross Country, to Virgin West Coast from 11 November 2007. From December 2008 additional and faster services will be put in place. The journey time will be further reduced by up to 30 minutes, giving an overall journey time of four hours.

Further capacity enhancements are being examined across the rail network. My Department is actively examining the needs of the passenger, the economy and the environment and will publish a high-level output specification and longer-term framework for the railways next summer.