Branson calls on Government to cancel all rail franchising competitions

Sir Richard Branson has urged the Department for Transport (DfT) to cancel all rail franchising competitions.

The Virgin Group boss claimed no more contracts should be awarded until the Government-commissioned Rail Review publishes its findings.

Former British Airways chief executive Keith Williams, who is leading the inquiry, has previously said the way train companies are contracted to run services is “no longer delivering clear benefits”.

Writing in a blog post, Sir Richard described two of the three outstanding franchise competitions as being “under a cloud”, insisting it is “far from clear that any franchise can be let robustly as things stand”.

He added: “The DfT should take a pragmatic view and cancel all franchising competitions whilst Keith Williams does his vital work.”

The Rail Review is due to conclude in the autumn.

Virgin Trains – a joint partnership between Virgin and Stagecoach – has run services on the West Coast Main Line since 1997.

Its bid to continue that role was disqualified by the DfT last month due to a row over how much risk should be taken on by operators in relation to pension liabilities.

Stagecoach has also seen its bids for the East Midlands and South Eastern franchises ruled out for the same reason.

The firm has called for an inquiry over the award of the East Midlands franchise after it was reported that Network Rail accidentally sent details of its bid to rival Abellio, which won the competition.

The DfT said an “expert third-party investigation established conclusively” that Abellio did not access information relating to other bidders that affected their own submission.

Virgin Trains East Coast – another joint venture between Stagecoach and Virgin – pulled out of running trains on the East Coast Main Line in June last year after revenue was lower than the operator expected.

Sir Richard accused the Government of “outsourcing as much risk as possible” and claimed it is “setting up franchisees to fail”.

He added: “Four other current franchises are now also struggling.”