First will not take over West Coast from December

[Bakerbloke]

The government would have pressed on with First even if the system was found to be flawed. No bidding process is going to be perfect. There must have been some serious error(s) for them to do this.

Anyway I imagine Malcolm Tucker is moving to the DfT now.

 

[Failed Unit]

Personally I don't think Branson has won, just everyone has lost. I would expect the franchise to move to DOR in December but nothing is announced. If Virgin do keep hold of it during the re-bidding process it will be a continuation of the existing terms. No baby Pendo's or new services unless DFT agree as they can't do anything that the next owner may not want to do. DFT will will have an iron grip on the franchise so until the re-tender is complete Virgin will not have any real influence.

This is really the worse case situation as it leave the Franchise in limbo with no development and a period uncertainty. I don't think that anyone has suggested otherwise, but the Virgin bid that came 2nd is as dead as firsts. (It could be that one of the other 2 bidders were in fact the best bid - I doubt we will ever know.)

Be intestering to see how this hits the other 2 live processes. Will FGW fall into DOR as well - if it does maybe we can call DOR Inter-City

 

[Butts]

Get DOR to run it and keep both of them

To be fair Branson said that if the government reviewed figures and they worked out he would walk away.
I wonder if Government lawyers looked at legal challenge and didn't like what they saw

Very salient , as for the Government a case of "damned if you do........."

 

[district]

Be intestering to see how this hits the other 2 live processes. Will FGW fall into DOR as well - if it does maybe we can call DOR Inter-City

And the new integrated Southern franchise Network South East

 

[marks87]

Not really. It shows that his PR muscle works stronger than the civil service.

So you're suggesting that:

• Patrick Mcoughlin and co. are prepared to be recalled by the Transport Select Committee
• The DfT are willing to suspend and investigate staff
• The DfT are willing to accept there's flaws in the franchising process
• The government are prepared to take flack left, right and centre
• etc.

...just because Virgin's "PR muscle works stronger"?

Really?

 

[SkinnyDave]

He didn't bully them, the government reacted before the legal challenge came, which means if the government had held their ground it would of been worse for them in the courts. Why? Because it was flawed.

It was no coincidence that Virgin and DFT were given dates for Judical Review and this has came around. Virgin must have presented a strong case or today's announcement would not have been made. Gets us all debating and talking though which is good and Otoole must be crying into his weetabix this morning

 

[Aictos]

As it stands, Virgin cannot operate services from the 9th December simply because the previous day was the expiry date of a existing extension hence DOR will be operating services under the West Coast brand.

It also means that the DFT has no choice but to restart the bidding process for the WCML and maybe potentially the others.

Otherwise Abellio and SNCF have the right to take court action if such a decision is not taken to restart the process - Virgin should NOT be running the services from 9th December or simply be allowed to carry on as that would be highly illegal as their existing extension as I've said above expired the previous day and it would be morally wrong to simply cave in and give Virgin a blank cheque to run the WCML for life.

 

[LNW-GW Joint]

It seems the top DfT team are not to blame - Permanent Secretary Philip Rutnam is leading the witch-hunt.
He's the one who couldn't wait to sign the franchise agreement with First, and sneered at Virgin in the TSC hearing.
Maybe it's a good thing Greening and Villiers moved on before the penny dropped. McLoughlin at least has a blank sheet of paper.

A problem with VT carrying on while the franchise competition is rerun is EU competition law.
Once you get beyond 15 years, and having already offered a 9-month extension, DfT may be obliged to get EU clearance if they are not going to appoint a new franchisee this year.

All the bidders are getting their costs paid - £60m perhaps?
I guess the DfT will be forking out £100m for the impact of this, plus the knock-on delay to the refranchising programme.
First preparation costs will no doubt also get refunded. Luckily the rebranding hadn't started.

Alstom will be gnashing their teeth. They must have been expecting an order from the winner, and now have at least another year to wait...
And the good burgers of Shrewsbury and Blackpool etc will have to get out their lobbying kit again.

All franchise competitions are paused while they sort out the process.
Richard Brown of Eurostar is now an important advisor on the new franchising process.

In private industry, the MD and FD would have gone by now.

 

[PR1Berske]

So you're suggesting that:

• Patrick Mcoughlin and co. are prepared to be recalled by the Transport Select Committee
• The DfT are willing to suspend and investigate staff
• The DfT are willing to accept there's flaws in the franchising process
• The government are prepared to take flack left, right and centre
• etc.

...just because Virgin's "PR muscle works stronger"?

Really?

None of what you say is accurate.

But yes, I'm saying this is a victory for Virgin's PR machine

I support, broadly, privatisation. I do not support unelected, unaccountable millionaires pushing a Government in a different direction by way of a campaign on Twitter.

The DfT are partly to blame, but this is yet another showcase of Branson's hideous attitude and self-worth.

 

[DXMachina]

Looking at the side-announcements about suspension of staff (this is particularly unusual)
I do not wish to make any allegation but this makes me wonder if bribes were paid.

Suspension and the risk of disciplinary action for making a mistake or misapplying process is vanishingly rare among the civil service - nobody lost their job over the Iraq war....

 

[Deerfold]

Suspension and the risk of disciplinary action for making a mistake or misapplying process is vanishingly rare among the civil service - nobody lost their job over the Iraq war....

But then noone has officially agreed that was a mistake.

 

[LTJ87]

The fact that this has happened just before the judicial review at the High Court means DfT had legal advice that they were going to lose badly at the High Court and be on the receiving end of a pretty damning judgment. Better to come forward and admit your mistake than have a judge do it for you.

A High Court judge would not in any way be influenced by the personalities and politics of the case.

From the interview given by the Secretary of State on BBC Radio 4 this morning the flaws identified are much wider than those cited by Richard Branson.

 

[Realfish]

First Group's shares down 17% this morning.

 

[RobShipway]

Looking at the side-announcements about suspension of staff (this is particularly unusual)
I do not wish to make any allegation but this makes me wonder if bribes were paid.

Suspension and the risk of disciplinary action for making a mistake or misapplying process is vanishingly rare among the civil service - nobody lost their job over the Iraq war....

Yes, but since then any Governments have made details from civil servants more clearer to the public for scrutiny.

I suspect as has been mentioned that DOR will run the franchise from 9th December due to European Competition rules, so expect either West Coast, InterCity-West Coast or even British Rail - West Coast!

 

[richw]

The gov obviously realised they were going to lose badly in court, the court was due to start today this announcement was made about midnight.
Reading between the lines it does sound like some form of corruption has gone on and gov have not wanted it in court so they can hide bits of it.
I was the first to criticise beardys pr on this, but after the gov announcement and deatails in the announcement I think we should be thanking him for highlighting the incompetence at the gov.

 

[LTJ87]

The DfT could always call Richard Branson up on his offer to run the franchise for free in the interim....

 

[lfc84]

there will be a few on this forum eating their own words.

im glad branson was right. well done.

i dont trust first group at all.

i trust the government less. £40m + in tax payers money down the drain.

 

[dggar]

Interesting account here

http://www.railnews.co.uk/news/2012/10/03-franchising-in-tatters-as-dft.html

 

[M60lad]

Does anybody have any idea of when the rebidding process will start again, will it be this year or will it have to be sometime next year now, and how long will it be now before we find out who's actually going to run it

 

[F Great Eastern]

there will be a few on this forum eating their own words. im glad branson was right. well done.

i dont trust first group at all.

Branson may well have had a point it seems, but he still went about it completely the wrong way if you ask me and that was always the main problem I had with him, not the fact he was lodging an appeal, but the hysteria and misleading statements he and Virgin put out!

First have done nothing wrong at all in this situation, so blaming them is silly. Any blame should be laid at the door of the DFT.

 

[HH]

Well I said I thought they'd lose after seeing the papers, and the rumours about disarray at the DfT were obviously true.

Personally I think the Franchise process, and in particular the way that winners are chosen, could do with a review. Hopefully that will be a positive to come out of this sorry mess, because there are lots of downsides, especially the sheer cost of all this to the government, which means us, the taxpayers.

I'm not sure how the Permanent Under Secretary can escape unblemished from this. Surely the Minister shouldn't just accept some scapegoats from down the line?

 

[PR1Berske]

Does anybody have any idea of when the rebidding process will start again, will it be this year or will it have to be sometime next year now, and how long will it be now before we find out who's actually going to run it

It'll be DOR for the time being, won't it?

 

[Metroland]

Not really. It shows that his PR muscle works stronger than the civil service.

Nonsense. The Government have said First and Virgin did nothing wrong, and it was civil servants that got it seriously wrong.

Branson has done exactly the right thing, suspected the process was flawed, couldn't get any answers, took it to court and astonishingly before the court case the DfT has put their hands up and said 'We got it wrong!'.

If Branson hadn't done this, the process would have been essentially bent and we'd have not got good value costing the taxpayer millions.

Now if I was investing my money in franchising, I want to know this process is fair and correct. First group must be extremely angry, their share price has dropped 15% and civil servants have made a mockery of hugely important private businesses and this rail industry in this country. It's an absolute scandal and has cost us all dear.

 

[F Great Eastern]

Nonsense. The Government have said First and Virgin did nothing wrong, and it was civil servants that got it seriously wrong.

Exactly. Although I still think Virgin could have went about it in a different way if they were that confident.

If Branson hadn't done this, the process would have been essentially bent and we'd have not got good value costing the taxpayer millions.

it's going to cost the taxpayer tens of millions now anyway I'd say from all the bid refunding and the compensation that the DFT is going to have to pay out.

First group must be extremely angry, their share price has dropped 15% and civil servants have made a mockery if hugely important private businesses and this rail industry in this country.

Agreed - glad someone can see the bigger picture instead of First vs Virgin which is not what it was about at all.

I see childish comments online saying people hope First goes bust as they are a disgrace and evil and other things which would be a terrible thing for this country and the economy and all the many staff. They did nothing wrong.

 

[IanXC]

Looking at the side-announcements about suspension of staff (this is particularly unusual)
I do not wish to make any allegation but this makes me wonder if bribes were paid.

Suspension and the risk of disciplinary action for making a mistake or misapplying process is vanishingly rare among the civil service - nobody lost their job over the Iraq war....

That is a very serious suggestion indeed.

Should there be any concern of that I would expect the SFO to be called in today.

 

[LTJ87]

I am inclined think there has been a genuine cock up rather than conspiracy/corruption.

Remember the original budget for The Olympics had to be revised because they forgot to include VAT.

 

[khib70]

That just about says it all for me. The sound of wailing and gnashing of teeth from the First Fanclub has made my day.

And if SRB hadn't had the guts to challenge this fiasco, we'd be none the wiser........

Must go and find some glee to rub my hands in.....

 

[Red Dragon]

He didn't bully them, the government reacted before the legal challenge came, which means if the government had held their ground it would of been worse for them in the courts. Why? Because it was flawed.

I agree with your comments, my understanding of the bids was that First "back end loaded" their bid so that they would cash in heavily as a direct result of increased passenger numbers and inflation towards the end of the contract term, but this wasn't picked up in the tender adjudication
I was involved in putting together and winning PFI bids over a long period, and the analysis of the bids and tender adjudication, by the client, is of paramount importance so that a proper analysis is made and apples are compared properly with pears by adding cost to the bid which is light, or is not taking the risk.
If the client (the government in this case) wants to offload risk to the private sector, then they need to employ people who understand risk and how we in the private sector maximise our reward. It isn't simply a case of transferring risk to the private sector - it's how that is achieved and at what cost to the public purse.
They (the government) screwed up and will now have to pay the bid costs of both parties (I guess £15 -£20 million each).
Another total fiasco by those people who refer to the rest of us as "plebs".

 

[AndrewP]

This is a sorry situation.

It seems like everything was being checked prior to potential litigation and some serious issues were found. They must have been very serious. If it was not then it could have been reassessed.

The DfT have failed badly and heads should roll. This is yet another excellent advert for outsourcing procurement to independent organisations. The civil service is bloated and inefficient and needs serious change (As one senior civil servant once said to me - few are civil and even fewer serve).

As for taking things forward the franchise can not stay with Virgin as it would not be appropriate unless a formal extension was negotiated. I also wonder if the accellarated OJEU process can be used in rail going forward so that the delay in award is minimised.

I still think Branson should have been more dignified but its just not his style. Seems he was right though - I am shocked how incompetent the DfT have been - their errors are so basic its ridiculous
--- old post above --- --- new post below ---

Another total fiasco by those people who refer to the rest of us as "plebs".

You mean a failure by the bloated public sector.

At least this lot admit when things go wrong unlike the Liar Party

 

[BrianTheLion]

http://www.railforums.co.uk/showpost.php?p=1219519&postcount=2937

Oh dear Wath Yard....