Virgin Trains and Stagecoach have been awarded the franchise for the East Coast Mainline rail services which run from London to Edinburgh.
The Department for Transport announced that the Virgin-Stagecoach joint venture had won the battle for the franchise, which has been run by the government since 2009 after previous franchise holder National Express handed it back after making heavy financial losses.
Virgin-Stagecoach’s winning bid, which is called Inter City Railways, saw off competition from two other short-listed candidates: First Group and a consortium of Eurostar and French company Keolis.
The new franchise will use Virgin Trains branding, which will replace the current East Coast Trains brand next year, even though Virgin only holds a 10 per cent stake in the joint venture with Stagecoach.
The decision to reprivatise the East Coast line has proved controversial and attracted fierce opposition from some politicians and union leaders, who claim it has returned almost £600 million to taxpayers, since it went into public ownership five years ago.
The eight-year franchise deal, which will start from March 1 2015, includes commitments for a range of improvement and enhancements to the East Coast line including 23 new services to London, more seats during the morning peak, and new direct links to northern towns and cities such as Huddersfield, Sunderland, Middlesbrough and Dewsbury.
Transport secretary Patrick McLoughlin said the contract would mean “more seats, more services and new trains”.
“We are putting passengers at the heart of the service. I believe Stagecoach and Virgin will not only deliver for customers but also for the British taxpayer,” added McLoughlin.
“This government knows the importance of our railways. That is why they are a vital part of our long term economic plan, with over £38 billion being spent on the network over the next five years.”
Patrick McCall, senior partner at Virgin Group, said, "We're delighted to have been chosen to run the East Coast franchise. Our long-term partnership with Stagecoach has seen a revolution in customer service standards, great product innovation, reduced journey times and improved timetables on the West Coast Mainline.
"Our partnership will concentrate on areas for which Virgin is famous, such as looking after our customers and our people. We have a great opportunity to blend the successes of the East Coast and the West Coast lines to create a great experience for all."
Stagecoach’s chief executive Martin Griffiths added: “We have some fantastic ideas to deliver a more personal travel experience for customers.”
The major initiatives for the East Coast Mainline will be as follows:
- 23 new services from London to key destinations, with 75 more station calls a day
- Plans for new direct links to Huddersfield, Sunderland, Middlesbrough, Dewsbury and Thornaby
- Proposals for more trains to London from Bradford, Edinburgh, Harrogate, Leeds, Lincoln, Newcastle, Shipley, Stirling, and York
- 3,100 extra seats for the morning peak time by 2020
- Across the entire train fleet there will be 12,200 additional seats – a 50 per cent increase
- 65 state of the art Intercity Express trains brought into passenger service from 2018, totalling 500 new carriages
- Journey times from London to Leeds reduced by 14 minutes, and from London to Edinburgh by 13 minutes
- £140 million investment package to improve trains and stations.