Earlier this week reports began to circulate regarding the future of the East Coast rail franchise, with some sources claiming an announcement would be made before the weekend. Transport Secretary Chris Grayling has now confirmed that the East Coast Mainline is set to be renationalised. The East coast rail franchise is run by Stagecoach who currently own 90% of the share and Virgin who own the other 10%
A statement has been released by Stagecoach confirming the move in which they said ‘We have now been advised by the Department for Transport that the Secretary of State for Transport has announced that he intends to appoint the ‘Operator of Last Resort (OLR) to operate the intercity East Coast trains services.’ Stagecoach and Virgin will hand control back over to the government from 24th June 2018. This will be the third time in just over a decade that the government has called a halt to the East Coast franchise. In 2005 GNER signed a £1.35 billion deal to operate the franchise for 10 years, the deal was cancelled after just one year. In 2007 National Express agreed to an even larger deal of £1.4 billion but then handed it back to the government in 2009 amid the financial crisis. Finally in 2015 Stagecoach and Virgin submitted a bid of £3.3 billion to run the franchise until 2023.
The decision won’t come as a complete surprise as Grayling said back in February that ‘Stagecoach had got it’s numbers wrong and would only continue to run the East Coast mainline for a small number of months’
What renationalisation means for the future of the East Coast Mainline and its regular commuters remains to be seen but always Traveleads will keep you up to date with the latest information as it becomes available.
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