West Coast Main Line deal scrapped after contract flaws discovered

[Gromit]

// Three civil servants are suspended after flaws in the bidding process for the UK's West Coast rail franchise will see it re-run at a cost of at least £40m. //

Anyone else thinking bribes?

[factor-fiction]

I doubt it. i think everyone was looking for a get out

[dave50]

Back pocket job

[DTCwordfan]

Could be - will come out in the Wash!

However, it could be a right-old-fashioned-cock-up of exquisite proportions.

[factor-fiction]

Why suspect backhanders? The winning bid was far lower, that's why it won. But the public preference seems to be for Virgin so it is convenient now to find a technical flaw in the process. Maybe even the bid winners were having second thoughts about whether they could deliver at that price

[DTCwordfan]

Wait for First Direct to take this into the High Court - I bet by the end of the week!

[humbersloop]

Thinking more about the £40m compo bill we'll be footing for the fiasco

[Canary42]

Yes.

[Bazile]

All's quiet here on the western front .

Imagine the criticism on here , of Labour , from some on here ; if it had happened on their watch - instead of this tory balls up .

[shoota]

How can a bidding process cost £40m minimum at a second run? All the preparation will have been done first time round.

[Baldric]

Is it just possible someones pension fund has had a bit of a boost?

[McMouse]

shoota......agree with you. Virgin claimed their bid was rational and properly costed. Why not put their bid back in the hat?

[Ellipsis]

Bazile, I'm not sure there's a political point to be made here. We shall see as it plays out but, on the news I heard this morning, it appeared that these flaws may have been inherent in the bidding system for some time, including under the previous Labour Government. See here, for example:

http://www.bbc.co.uk/...and-business-19814229

>> The problem is a long-standing one with the rail franchising system. It's based on the idea that government can both take a big wedge of money off train operators while also transferring all the risk over to those companies.
>> That has proven flawed, in that it encourages over-ambitious bids on which rail operators may then fail to deliver, forcing the government to take over operations. That's why the East Coast rail franchise is back in government hands, again.

[DTCwordfan]

Agree, it's all very well for the Millipede and his Mob to get on their high horses as it is more than likely that they were incumbents when the franchising process was set into concrete. If I was them, I'd be keeping my head down and hope that the brown stuff does not come my way.

[bazwillrun]

The usual civil service ineptitude, probably some corruption and handshakes in clubs etc.
I suppose Greening will be the sacrificial lamb.

I want to know how comes this was signed off at the highest level yet nobody notices these major balls ups until they get taken to court.

this is Whitehall and career civil servants at its best, people who for the most part couldnt cut it in the private sector

The cost should be taken from the depts ongoing budgets and there should also be no bonuses for those concerned.

[dickythecook]

I would think that Virgin know down to the last penny how much it costs to run that franchise and how much profit they get out of it. When Sir Richard said that First had put a ridiculously low bid, someone somewhere should have flagged it. Perhaps the people concerned didn't like Branson or perhaps they couldn't get a consultancy with his firm. (the last bit is obviously the start of a scurrilous rumour that has no basis in fact)

[ludwig]

Gromit, I must say I'm impressed you've managed to question this without once using any of the following words/phrases - 'fiasco, shambles, yet another u-turn from this discredited coalition government'.

[emmie]

ludwig so am I

[LazyGun]

It was my understanding that FirstGroups bid was significantly higher than Virgins, and was one of the reasons given for winning the award, in preference to Virgin. It was this bid valuation that Richard Branson called ludicrous.

It now seems that the DfT failed to properly assess the risk, failed to ensure an adequate risk capital bond to protect the taxpayer, and failed to properly assess the business case of leaving a large balloon payment until the end of the franchise period.

Some of these factors are a legal requirement of the bidding process, and this was the basis of Virgins court case. The now Secretary of State has admitted the error was entirely down to flawed decision making within the DfT. In addition to costing the taxpayer a substantial fee in compensation, this decision also means that several other high profile franchise bids have also been halted - this means the taxpayer faces the prospect of paying large sums in contract extensions to existing franchise holders.

As far as Justine Greening - the Secretary of State for Transport who presided over this franchise process - is concerned, most of the time it is perhaps inappropriate to blame the minister since they may not have the relevant expertise - but Greening was and is an accountant by training, and has worked for some big name companies. It seems that she at least should have been able to spot the mistaken risk assessment.

http://www.guardian.c...-mean-rail-franchises

Franchising and privatisation are supposed to reduce the cost to the taxpayer,improve the quality and quantity of the service, improve the rolling stock, and drive fares down. None of this seems to have happened.

[youngmafbog]

Probably because our Gromit realizes it is not a political event, most likely civil servants 'bending' the rules in this instance.

I had serious misgivings on the awarding of this contract in the first place, but if a bidding procedure is in place it must be followed, unless there is solid evidence of a breach of the code.

As pointed out about, once wonders how it will cost 40m to re-run it.

[redman41]

If Virgin Trains (Richard Branson)is doing a good job of running the Service the franchise should not be put out to tender.
There should be a review of the Service every 5 Years or so, and if Virgin are falling short in their requirements, then it should be put out to tender.
This unnecessary farce has cost us the Taxpayers millions.
Hope Virgin Trains keep the Contract.