Transport secretary Chris Grayling yesterday informed Parliament that he will terminate the Virgin Trains East Coast contract and bring the line back under government control.

Grayling had been considering renationalisation of the line, as well as the option of a not-for-profit deal with existing franchise operators Virgin Trains and Stagecoach.

However, Grayling will terminate that contract – which was meant to run until 2023 – on 24 June this year.

The Department for Transport will run the East Coast Mainline under the revived name of London North Eastern Railway (LNER) until a new contract is granted in 2020.

In a statement, the DfT said: “We want to assure you that your journeys on the East Coast Mainline won’t be affected. Tickets, timetables and train services will all stay the same even though a different operator will be in charge.”

Passengers have been advised to continue contacting Virgin Trains East Coast for enquiries and bookings until the transition to the new operator is complete.

Grayling said he will create a new board “with an independent chair” to oversee the operation of LNER. The team that has been working to form what Grayling calls the Operator of Last Resort will work with Network Rail to bring together those working on track and trains.

Following widespread criticism of Virgin and Stagecoach, Grayling has made the decision not to penalise the groups, saying an independent panel has found “no suggestion of either malpractice or malicious intent in what has happened”. As such, the DfT will allow both firms to operate on railways in the future.

Virgin and Stagecoach have operated the franchise since 2015. This is the third failure on the East Coast Mainline in less than a decade, with Great North Eastern Railway losing the route after just one year in 2006 and National Express backing out of its contract in 2009 during the financial crisis.

During his speech, Grayling also admitted the DfT has not formed a plan for operating the Great Northern line when Govia Thameslink’s contract ends in 2021 and the franchise is split from Thameslink and Southern.  

Former transport minister Lord Adonis, who has been vocal in his criticism of the troubled franchise, said on Twitter that while there were “a lot of questions raised by [Grayling’s] vague ‘public private partnership’” statement, the transport secretary is “right to set up a state company as a first step”.

Read Grayling’s full speech here.

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