Virgin gets 23 month West Coast extension
6 Dec 2012
The Department for Transport today announced Virgin Trains will run the West Coast main line on a short franchise until November 2014 before the route is let under a long term franchise.
The 23 month long franchise will operate as a management contract with both the revenue and cost risk being borne by the DfT while Virgin Trains will receive a margin of 1% of revenue for operating services. The line’s revenue in 2012 was £429 million, up over 9% on the previous year with profits of more than £21 million.
ASLEF General Secretary Mick Whelan said ‘Virgin Trains have struck an excellent deal for their shareholders with the Department for Transport. They bear no risk whatsoever over the course of the 23 month franchise and the taxpayer will underwrite the services they provide whether revenues go up or down. This decision again demonstrates that rail franchising delivers good value for private train operators but not passengers and taxpayers.’