The great rail debacle

I’ve been a little busy recently. This blog has had to take a back seat, as it were. But this morning’s announcent by the Transport Secretary that the franchising process is flawed, is quite the most extraordinary admission and begs some comment. We do not know – other than what Richard Branson claimed (see post 15 August 2012) – exactly what these flaws are, but the implications are signficant.

First Group this morning found its share price down 20 per cent even though – as the Transport Secretary said this morning on the Today programme – the firm is blameless. Three officials from the Department for Transport find themselves suspended. The whole franchising process which currently has a number of franchise bids in progress is now disfunctional. And the taxpayer will have to foot the bill for the costs incurred by those who bid in the West Coast franchise amounting to at least £40m.

It is not coincidental that this admission comes now as Branson’s case was due to be heard in court. It was clearly going to be even more embarrassing to have the court reveal the shortcomings.

And let us not forget the nonsense that is rail franchising in and of itself.

McLoughlin on Today 4 Oct

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