Great Western Coffee Shop

Transport Secretary Patrick McLoughlin has today announced that the competition to run trains on the West Coast Main Line has been cancelled following the discovery of significant technical flaws in the way the franchise process was conducted.

The decision means that the Department for Transport (DfT) will no longer be awarding a franchise contract to run the West Coast service when the current franchise expires on December 9. It is consequently no longer contesting the judicial review sought by Virgin Trains Ltd in the High Court.

The flaws uncovered relate to the way the procurement was conducted by department officials. An announcement will be made later today concerning the suspension of staff while an investigation takes place.

The Government is resolving urgently the future arrangements for operation of the West Coast and will ensure that train services continue uninterrupted. Mr McLoughlin stressed today that passengers will continue to be served by the same trains and frontline staff.

The Transport Secretary has also:
Ordered two independent reviews to be undertaken urgently: the first into what went wrong with the West Coast competition and the lessons to be learned, the second into the wider DfT rail franchise programme, both overseen by leading business figures;
Asked officials to examine the options for the operation of the West Coast service after December 9, taking into account procurement and competition law;
Paused all the other outstanding franchise competitions (Great Western, Essex Thameside and Thameslink) pending the independent reviews which are designed to ensure future competitions are robust and deliver best value for passengers and tax payers.

Mr McLoughlin said:

^I have had to cancel the competition for the running of the West Coast franchise because of deeply regrettable and completely unacceptable mistakes made by my department in the way it managed the process.

^A detailed examination by my officials into what happened has revealed these flaws and means it is no longer possible to award a new franchise on the basis of the competition that was held.

^I have ordered two independent reviews to look urgently and thoroughly into the matter so that we know what exactly happened and how we can make sure our rail franchise programme is fit for purpose.^

He added:

^West Coast passengers can rest assured that while we seek urgently to resolve the future arrangements the trains that run now will continue to run, with the same drivers, the same staff and timetables as planned. The tickets that people have booked will continue to be valid and passengers will be able to make their journeys as planned.^

DfT permanent secretary Philip Rutnam said:

^The errors exposed by our investigation are deeply concerning. They show a lack of good process and a lack of proper quality assurance.

^I am determined to identify exactly what went wrong and why, and to put these things right so that we never find ourselves in this position again.^

The first independent review will be an urgent independent examination into the lessons to be learned from the Department^s handling of this competition. Conducted by independent advisers and overseen by Centrica chief executive Sam Laidlaw and former PricewaterhouseCoopers strategy chairman Ed Smith, both DfT non-executive directors, this review will look as soon as possible at what happened and why with a view to delivering an initial report by the end of October.

The second independent review will be undertaken by Eurostar chairman Richard Brown CBE, and examine the wider rail franchising programme. It will look in detail at whether changes are needed to the way risk is assessed and to the bidding and evaluation processes, and at how to get the other franchise competitions back on track as soon as possible. This will report back by the end of December.

Evidence of significant flaws in the Department^s approach emerged while officials were undertaking very detailed evidence-gathering in preparation for legal proceedings in the High Court.

These flaws stem from the way the level of risk in the bids was evaluated. Mistakes were made in the way in which inflation and passenger numbers were taken into account, and how much money bidders were then asked to guarantee as a result.

The Department cannot be confident that these flaws would not have changed the outcome of the competition or that any of the four bidders would not have chosen to submit different offers.

The DfT has spoken to the four bidding companies to inform them of the flaws that the Department discovered. The DfT will reimburse their bid costs and has assured them that a fresh competition will be started as soon as the lessons of this episode are learned.

Likely to be Directly Operated Railways then or even an extension for Virgin, with the whole process having to be restarted. Justine Greening and Theresa Villiers also need to be called to account. Very convenient that they are no longer at the DfT though. The whole thing stinks.

We also appreciate the DfT publicly acknowledging these errors, and are hopeful they will now accept that Virgin Trains should carry on running the West Coast Main Line and ensure that passengers continue receiving our team's award-winning service.

West Coast Main Line deal ditched
Breaking news

Ministers have scrapped the decision to award the West Coast Main Line rail franchise to FirstGroup saying the bidding process was flawed.

The contract - awarded in August - was immediately challenged in the courts by Virgin Trains, which lost out.

Ministers say there were "significant technical flaws" in the way the risks for each bid were calculated and say the bidding process must be rerun.

They have also ordered two independent reviews into what happened.

One will examine how the West Coast franchise competition went wrong, and what lessons can be learned.
'Deeply regrettable'

The other review will look into the wider Department for Transport rail franchise programme.

Transport Secretary Patrick McLoughlin described the mistakes made by his department as "deeply regrettable and completely unacceptable".

He said: "A detailed examination by my officials into what happened has revealed these flaws, and means it is no longer acceptable to award a new franchise on the basis of the competition that was held.

"West Coast passengers can rest assured that while we seek urgently to resolve the future arrangements the trains that run now will continue to run with the same drivers, the same staff and timetables as planned."

FirstGroup was due to take over train services on the line - one of Britain's busiest - in December.

The Department for Transport said because of the decision to rerun the bidding process it would no longer be contesting the judicial review launched by Virgin Trains in the High Court.

And it said an announcement would be made about the suspension of staff while the investigation into the mistakes is carried out.

Simple solution. Switch the process to Gross Cost Tendering.

I await with interest the press release from the bearded one. One hopes he isn't too smug with his, "I told you so."

Why can't a train company buy its own trains?

However, It does beg to bring the question that is there something much more underhat here? I'm always intrigued into conspiracy theories, and I have 1 or 2 regarding this recent press release. One of which when compared to another Intercity Route is entirely plausible and I cannot be the only one who's thought it?!!

East Coast is now under Public Ownership as part of DOR. It was meant to be re-franchised; but to date it hasn't (NXEC went bang a number of years ago.) Sparking the rumor that the Government was receiving a tidy sum from it's running. So is it completely unrealistic to say, that someone high up the food chain has realised they could potentially make more money from a nationalised WCML in a similar way to ECML? Personally, I can see how somebody has realised this and has effectively covered it up. (Sounds wrong, but has been done before in cases not exclusively to the railways)

If this all takes a considerable time to resolve, we could potentially be seeing other franchises pass into Public Ownership (GWML etc).

Either way... Looks like a lot of 'big names' (and I use that term very loosely) are more than just in the dog house........ :-X >:( ::)

The Transport Secretary has also:

Ordered two independent reviews to be undertaken urgently: the first into what went wrong with the West Coast competition and the lessons to be learned, the second into the wider DfT rail franchise programme, both overseen by leading business figures;

Asked officials to examine the options for the operation of the West Coast service after December 9, taking into account procurement and competition law;

Paused all the other outstanding franchise competitions (Great Western, Essex Thameside and Thameslink) pending the independent reviews which are designed to ensure future competitions are robust and deliver best value for passengers and tax payers.

First Group are taking a massive financial hit on the markets this morning. In just the first hour of trading their share price has fallen by over 18%.

DfT permanent secretary Philip Rutnam said:

^The errors exposed by our investigation are deeply concerning. They show a lack of good process and a lack of proper quality assurance."

^I am determined to identify exactly what went wrong and why, and to put these things right so that we never find ourselves in this position again.^

I've probably posted it before. But the Montpieller - Lorca service runs under wires from Montpieller to Alicante hauled by an Electric Loco.

Now that the process is starting again, IF Virgin succeed, will they have have to fullfill these promises ?

Now that the process is starting again, IF Virgin succeed, will they have have to fullfill these promises ?

No-one else has spotted this one yet. For the minister to have made the wrong decision based on the wrong interpretation of First's figures by a civil servant, First's figures must have been wrong in the First place. That may come to haunt them in the future, possibly for a very long time.

You heard it here First.

Isn^t it annoying when something you^ve paid for gets cancelled, commuters ask FirstGroup

After the decision to award the UK^s multi-billion-pound West Coast Main Line rail franchise to FirstGroup was cancelled by the government, customers claimed that it now knows how its customers feel while waiting for one of their trains.

Transport Secretary Patrick McLoughlin cancelled the deal before standing outside FirstGroup^s head office and using a megaphone to issue an apology for any inconvenience it may have caused.

^This is completely unacceptable,^ said a FirstGroup spokesperson.

^To pay for something only to find that it has been cancelled with just a few minutes notice is infuriating.^

^What^s even more frustrating is that there^s no-one around to tell us what^s going on.^

^Three minutes ago everything looked like everything was still on schedule, but now this screen is telling me it^s cancelled. A little more notice would have been nice.

Rail tender cancelled

Mr McLoughlin responded to FirstGroup^s anger and frustration by shrugging his shoulders and walking off saying it was ^completely outside of his control^.

^We^re looking at alternative franchises for them, on which their tender will remain valid,^ said McLoughlin.

^Sure, owning a subway franchise in Slough is not quite the same as the one they thought they were buying, but then neither is a bus ticket from Stoke to London when you bought a train ticket from Manchester.^

Makes you wonder how these idiots in the government manage to breathe without help.

Its mainly down to inflation, and although sounds more the weighting of the First bid meant allowing for inflation it would potentially work out a poorer deal financially.

If "hatred of Virgin" by Civil Servants was the motivator said Civil Servants will be attending "meetings without coffee" and could drawing their pension early

FirstGroup statement re: InterCity West Coast Franchise

Wednesday 3 October 2012

We were notified late last night that the Department for Transport (DfT) has apparently discovered significant technical flaws in the way their franchise process for the InterCity West Coast was conducted and have consequently cancelled the competition for this franchise. We understand the DfT has ordered two urgent independent inquiries into the West Coast competition and the wider DfT rail franchise programme. Until this point we had absolutely no indication that there were any issues with the franchise letting process and had received assurances from the DfT that their processes were robust and that they expected to sign the contract with FirstGroup soon. We are extremely disappointed to learn this news and await the outcome of the DfT's inquiries. The DfT have made it clear to us that we are in no way at fault, having followed the due process correctly. We submitted a strong bid, in good faith and in strict accordance with the DfT's terms. Our bid would have delivered a better deal for West Coast passengers, the taxpayer and an appropriate return for shareholders.

West Coast Main Line: FirstGroup considers legal action over contract fiasco

FirstGroup is considering legal action against the Department for Transport after it pulled the controversial West Coast rail bid in a humiliating about-turn, plunging the entire industry into chaos.

The bus and rail operator, which had been awarded the contract after bidding ^13.3bn to run the London-to-Scotland services until 2028, saw its shares dive by more than a fifth, falling 50.6 to 193.4p.

Analysts said the potential loss of ^40m cash flow this year and ^50m of operating profits next could lead to fresh fears over FirstGroup's balance sheet and signalled a near-certain dividend cut.

Karl Burns, at Shore Capital, said: "This could lead to fears over the loss of the franchise and subsequent balance sheet concerns." Gert Zonneveld at Panmure Gordon said: "I don't think the dividend looks sustainable."

The decision by new Transport Secretary Patrick McLoughlin to pull the contract came after the "discovery of significant technical flaws in the way the franchise process was conducted". Three DfT officials have been suspended.

The flaws were unearthed as the transport department was poised to hand to the court its case for rejecting a judicial review of the bid by Virgin Rail, the losing bidder controlled by Sir Richard Branson that has run the London-to-Scotland service for the past 15 years.

Mr McLoughlin's move came as a surprise to FirstGroup which, only on Tuesday, issued a trading statement saying it continued "to prepare for a successful mobilisation" on the West Coast on Dec 9.

Tim O'Toole, FirstGroup chief executive, said he was "gutted" by the decision and stood by his bid. "I would deliver it today," he said. Asked whether FirstGroup could take legal action, a spokesman said: "We are looking at all our options."

The news was broken to Mr O'Toole via a phone call from Mr McLoughlin just before midnight on Tuesday. He also called Sir Richard and Sir Brian Souter, chief executive of Stagecoach, which owns 49pc of Virgin Rail.

Sir Richard, who spent ^14m on Virgin Rail's bid, said Mr McLoughlin had apologised and admitted "the Department for Transport was 100pc guilty. We so believed we were right on this."

The discovery of the errors is a humiliating setback for the transport department, which had repeatedly rebuffed questions from Virgin Rail over how it had assessed the bids. Industry sources pointed the finger at former Transport Secretary Justine Greening, moved in last month's reshuffle to International Development, and Theresa Villiers, the former rail minister promoted to Northern Ireland Secretary.

Ms Greening had insisted she had overseen a "robust" process, leading Mr McLoughlin to tell MPs on the Transport Committee last month that: "I am content with the way the Department exercised its review of the contract."

He has now found: "Mistakes were made in the way in which inflation and passenger numbers were taken into account, and how much money bidders were then asked to guarantee as a result."

The findings go to the heart of Virgin Rail's complaint that because of FirstGroup's riskier bid, based on revenue growth of 10.4pc a year, it should have been required to put more capital at risk that ^190m.

Due to flaws in the franchising process, Mr McLoughlin has now also suspended three other bids ^ Great Western, Essex Thameside and Thameslink. The Government has also undertaken to return bidders' costs that could total ^50m.

Mr McLoughlin has also asked senior businessmen to undertake two urgent reviews. Centrica chief executive Sam Laidlaw and PwC strategy chairman Ed Smith will scrutinise what went wrong on the West Coast, while Eurostar chairman Richard Brown will look at the "wider franchising programme".

Mr McLoughlin also met Tony Collins, the Virgin Rail chief executive, yesterday to discuss extending its current West Coast contract on a management basis. It could take a year before the contract is rebid.

West Coast Main Line: Minister 'not aware' of rail flaw

Former Transport Secretary Justine Greening did not know about the problem which led to the collapse of the West Coast Main Line franchise award, the Department for Transport has said.

The award of the franchise to FirstGroup was scrapped on Wednesday because of bidding process "flaws".

The Times has reported that she learned of a potential flaw a week before the Cabinet reshuffle on 4 September.

The DfT says this was not the error that caused the process to collapse.

Three civil servants - who face possible further disciplinary action pending an investigation - have been suspended after the government admitted major failings over the contract to run the rail line.

BBC transport correspondent Richard Westcott said the department told him Ms Greening had been made aware of an area of "potential concern" but that she had been told it would "not affect the outcome".

She asked officials to check it further and it turned out to be a "minor error". The department insists it is not related to the main flaw that they found later on and which brought the whole process down.

Transport Secretary Patrick McLoughlin said a "terrible mistake" in evaluating the relative merits of four bids had been made by Department for Transport staff and that the fault lay "wholly and squarely" with the department.

Staff reportedly failed to include predicted passenger numbers and inflation forecasts in some of the risk assessments of the rival bids from firms.

They included Sir Richard Branson's Virgin Trains, which currently runs the route - which links London with Glasgow and Edinburgh via the Midlands and north-west of England.

Mr McLoughlin said the estimated cost of reimbursing the four companies for the cost of their bids would be ^40m.

Meanwhile, the Public and Commercial Services union, which represents one of the suspended men, said it would ensure the inquiry examined all the issues, including ministerial involvement and oversight of the bidding process.

General secretary Mark Serwotka said: "The way ministers have sought to blame civil servants in the Department for Transport before any of the facts have been established has been deplorable but sadly not out of character. It is entirely consistent with the way the civil service is being treated by many ministers as an irritation, rather than as a professional body that works to ensure the smooth running of government."

Scotland's transport secretary has hit out at the handling of the franchise, saying the Scottish Government had been given no notice of the decision to scrap the FirstGroup deal.

In a statement at the Scottish Parliament, Keith Brown said: "The department's handling of the procurement process has been incompetent and shambolic. Most importantly, it has caused a great deal of confusion and speculation about arrangements for West Coast services after the franchise handover date of 9 December."

He said the Scottish government would be keeping a close eye on assurances which had been given by the Department of Transport that services would not be affected.

.......... yet when a CEO of a Bank "does not know why something was done in a large company" the politicians hang them out to dry and demand resignations yet a politicians feel is fine to use such an excuse

or perhaps there are other reasons. 

JUSTINE GREENING FACING CALLS TO QUIT OVER RAIL FIASCO

JUSTINE Greening faced calls to resign last night for her role in the West Coast Main Line fiasco.
Britain^s rail industry was plunged into chaos after Transport Secretary Patrick McLoughlin pulled the plug on the new ^5.5billion franchise.

FirstGroup had been due to take over the London to Glasgow route from Sir Richard Branson^s Virgin Trains.

The deal was scrapped after Mr McLoughlin found ^unacceptable mistakes^ made by the Department of Transport in the bidding process while Miss Greening was in charge.

He admitted the mistakes will cost the taxpayer ^40million in compensation to bidding firms.

Graham Stringer, Labour member of the Commons transport committee, called for the new International Development Secretary to quit over her refusal to follow up concerns about the bidding process.

He said: ^Officials have clearly made mistakes but the prime responsibility lies with ministers.

^When the scale of the concerns about this process became clear Justine Greening should have called a halt to the process. I don^t think she can escape her responsibility just because she has moved department.

She has cost the British taxpayer at least ^40million and damaged the Government^s credibility. That should finish her career in Government.^

Mr McLoughlin has suspended three civil servants and frozen three other franchise bids ^ Great Western, Essex Thameside and Thameslink.

Miss Greening^s aides insisted she had ^acted properly at all times^.

West Coast mainline and the mistakes that ended rail bid

The BBC has learned more details of mistakes made by the Department for Transport that led to the collapse of First Group's bid for the West Coast mainline.

As well as forgetting to take inflation into account, officials were responsible for double-counting. They also took short-cuts that were against the rules.

The system used to decide the contract was extremely complex, but the mistakes that killed it were simple.

Failing to include inflation assessing the level of risk in the bid is not such a problem when you are looking six months ahead. But it is a disaster if you are trying to predict the economy in 2025.

The computer models they used were specifically designed by the Department for Transport to deal with a whole bundle of franchise contracts due for renewal in the next few years.

This was the first big test.

We also now know that the fatal flaw wasn't discovered until last week - it then took until Tuesday of this week to unearth its true horror.

The fact that human error played such a part casts a shadow over previous franchise bids, although they would have been decided using a different computer model.

It will be some months before a review decides whether the whole system needs to be changed.

So is it the system, the people, or the use of the system that is the big problem, and who designed the system?

Turning political will into commercial model is never going to be easy. "Privatise the railways!" is simple to say. Figuring out how to do it isn't, though.

Of course, as we all know, First Group did not end the FGW franchise 3 years early. It will not end until the date specified in the contract. It is just that they did not choose to take up their option to extend the contract by 3 years in just the same way as the DfT did not refuse to take up its option not to give a 3 year contract extension. But this is what the politicians do dirty their political opponents and that applies certainly and equally to the two main political parties and what gives politics a bad name for twisting the truth.

No wonder their are calls now for renationalization of the railways.

http://www.guardian.co.uk/commentisfree/2012/oct/04/public-want-railways-renationalised

But if the civil service cannot run the franchise process.  Or an economic train procureemnt process how do you think they are going to run a nationalised railway? After all civil service interference in BR does not set a shining precident.  Trying to fix the franchise process may be preferable.

Just because someone MAY have incorrectly applied an arcane procedure, it doesn't make the whole civil service useless. I have, of course, made mistakes, although mine are always cheaper.

I've done ranting. Any more Civil Servant bashing, and when I get to work next, I shall find your records, and press Shift+Ctrl+K on my keyboard. Then you'll be sorry!

No offence taken, ellendunne.

A little more information is in my possession that was the case this morning in any case. One of the suspended civil servants has gone public. Kate Mingay, whose ^140K pa salary is indicative of a position in the very upper echelons, has spoken to the Times, to explain that it isn't her fault. She was formerly a banker with Goldman Sachs, and may have been attracted to the civil service by the cut in pay, lack of opportunity, and the wish to be used as a scapegoat by either the government , the media, or the public. Or she may have been brought in specially, to provide those cutting edge skills needed for such a job. Either way, going public suggests she isn't thinking of going back to her job at DafT.

We lower orders don't move around much. Our bosses do, but we get on with things, in spite of them. I've served under only one queen, but seven prime ministers. I am used to me getting the blame, them getting the credit.

"I would like to make it clear that I did not have lead responsibility for this project. Neither I nor any member of my team had any responsibility for the economic modelling for this project or for any Department for Transport project.

"Nor did I have any responsibility for the financial modelling in respect of this project."

But if the civil service cannot run the franchise process.  Or an economic train procureemnt process how do you think they are going to run a nationalised railway? After all civil service interference in BR does not set a shining precident.  Trying to fix the franchise process may be preferable.

I do not look back at BR through rose coloured spectacles,clearly it had its downsides as well,but when you compare the up and downs of BR and our privatised railway,the up side of BR wort's and all namely that it was one much more efficient unified organisation from the taxpayers point of view outweighs all its downsides.
 As the Guardian puts it "The problem seems to be that despite the financial crash of 2008, Britain's political elite are still in thrall to neoliberal dogma. This dogma holds that nationalised industries are inherently "inefficient" and that "private sector solutions" are always best. But this flies in the face of the evidence of the past 33 years. No one who travels regularly on the eminently affordable, reliable and comfortable state-operated railways of, say, Germany and France could say ^ hand on heart ^ that they are less efficient that Britain's overcrowded and hideously expensive privatised trains."
  Remember it was BR who came up with the bargain basement HST and if BR had been publicly funded to the same level as our privatised railway system then there is no doubt in my mind that we would already now have a fleet 155mph tilting APT trains running the length and breadth of country on an all electrified main line railway. Instead we are still having to pour mind boggling amounts of public money into the railway in order to prop up a discredited system that clearly is not working financially for the passenger or the taxpayer,only the private companies involved.The only thing that has stopped the whole privatised railway from imploding to date is above inflation fare rises and massive taxpayer support that cannot go on as the West Coast franchise disaster has shown. No one else in the world uses our privatised railway model,that should tell you something. I am not necessarily promoting re nationalisation but somehow our fragmented inefficient railway has got to be put back together again somehow as the previous 150 odd years of railway operating experience showed to be necessary for the operation of an efficient cost effective railway.

No way to run a grown-up railway

The West Coast Main Line debacle is evidence of a deeply flawed rail network

Last Tuesday, as daylight faded on the evening rush hour, Virgin Trains was providing some much-needed stress relief ^ for its customers, and perhaps also for itself. On the platform at Stafford, the company launched ^the UK^s first pet therapy service at a railway station^, with a ^collection of animals available for commuters to sit with and stroke^. Given Virgin^s imminent extinction as a rail operator, one unkind observer thought one of the creatures should have been a dodo.

By the end of that same night, however, a rather different group of people were in urgent need of therapeutic furry friends. At 11.30pm British time, in his New York hotel room, a stunned Richard Branson, Virgin^s owner, took a call from the Transport Secretary, Patrick McLoughlin. Officials had found ^deeply regrettable and completely unacceptable^ mistakes in Virgin^s sacking from its franchise to run the West Coast Main Line, the backbone of Britain^s rail network. Three civil servants had been suspended. The whole competition would be re-run.

Virgin Trains had lived, at least temporarily, to fight another day. But far more importantly, on Tuesday night, a southbound Class 390 express had crashed through the Government^s flagging credibility, through one of its most cherished projects ^ HS2 ^ and through its fundamentally flawed idea of how to run a railway.

To a triumphant Sir Richard, of course, Virgin^s reprieve was all that mattered. Before it, he^d quite seriously claimed that his loss of the franchise was ^bad for the country^. Since 1997, he said, in a ^remarkable achievement by our team,^ Virgin had ^transformed^ the West Coast line. ^I am immensely proud of our staff for turning it from a heavily loss-making operation into one that will return the taxpayer billions in the years to come,^ he said. Celebrities clustered round one of their own: ^Shame to see brilliant Virgin Trains unrewarded for such hard work,^ tweeted Derren Brown. A Downing Street petition urging a rethink and claiming that ^the West Coast Main Line^s current value is thanks to millions of pounds of investment and commitment from Virgin Trains^ drew almost 175,000 signatures.

It was a sobering symptom of public credulousness, and the power of Branson^s superb personal PR. The West Coast line has indeed been ^transformed^ but this ^remarkable achievement^ is almost entirely the work of the taxpayer, not Sir Richard. It was the Government, not Virgin, that paid ^8.7 billion to upgrade the tracks and signalling, making possible today^s faster, more reliable and more frequent trains.

In British Rail days, again contrary to Virgin^s claims, West Coast was profitable. Since Branson took it over, however, far from ^returning money to the taxpayer^, he has in fact taken almost a further ^2 billion in public subsidy just to run the service. This is the first year, in Virgin^s 15-year franchise, when its premium payments to the Treasury will exceed the subsidies it receives from the public purse.

Despite this, however, Virgin charges some of the network^s highest walk-on fares: a peak return from London to Manchester is just under ^300, up 37 per cent in five years. The morning peak period, during which such fares are charged, has been gradually extended to finish as late as 11.20am, while Virgin^s evening peak for most English destinations now starts at 3.01pm.

On comparable routes, FirstGroup, the rival that thought it had defeated Virgin on the West Coast, has cheaper walk-on fares and better punctuality. But First, too, is a deeply problematic company. Its passenger satisfaction ratings trail Virgin^s. Three years ago, it was running its Thameslink franchise so conspicuously badly that the then transport secretary, Lord Adonis, threatened to sack it.

And First is just as clever as Branson at the subsidy game. For its Great Western franchise, First did a deal that involved receiving mainly subsidies in the early years and then paying mainly premiums to the taxpayer later. Having collected the subsidies, First is now surrendering the franchise three years early ^ thus avoiding paying most of the premiums. Taxpayers are ^826 million down as a result.

Indeed, the franchising system, for many rail companies, is not far off a one-way bet. If, after the first few years of a company^s franchise, revenue falls short of their expectations, the Government makes part, or most, of it up to them in so-called ^revenue support^. Currently, seven of Britain^s 19 rail franchises benefit from this arrangement. Of the ^1 billion paid by the 19 to the Treasury in premiums this year, around ^450 million is now returned to the seven in ^revenue support,^ up 55 per cent in the past 12 months. (This money is separate from the further subsidies paid to Network Rail to maintain the track and infrastructure, and the yet further subsidies paid directly to some local operators to run services.) As even Whitehall now admits, revenue support has caused ^perverse outcomes, as well as significant financial liabilities for the Government^.

All this suggests the real reason why Virgin was so angry about the West Coast deal: operating Britain^s biggest railway, in Branson^s own words as reported by his biographer Tom Bower, is a ^licence to print money^. But the money being printed is substantially taxpayers^ and farepayers^ ours, in other words. Public subsidy for the railways has risen, in real terms, as much as threefold since privatisation. And there is one final irony: despite its rail operation leaning so heavily on the taxpayer, Virgin Group is largely held offshore, through family trusts in the Channel Islands and the Caribbean ^ substantially reducing its own liability for British taxes.

Yet hard as it may be to get worked up about which one of two unappealing companies gets to paint its logo on some trains, Sir Richard has done us a big favour by exposing the broken nature of the franchising system. Last year, the Government tried to reform rail franchises to avoid the ^one-way bet^ of revenue support. They made franchisees put up a risk-related ^performance bond^ to guard against broken promises, and they linked future revenue demands and revenue support to future changes in the economy. West Coast is the first franchise to be let under the new rules. But it is precisely these calculations, the level of the performance bond and the likely changes in the economy, that the civil servants assessing Virgin against First appear to have got so badly wrong.

The debacle has implications well beyond the West Coast route. Some of the same statistical models are being used, in different ways, to justify a new high-speed line from London to Birmingham, HS2. Opponents now have extra ammunition to argue that HS2^s figures do not add up.

More widely, of course, the fiasco feeds a wider and very damaging ^narrative^ of coalition incompetence and chaos. Extraordinarily, late on Friday night, one of the suspended civil servants, Kate Mingay, hired libel lawyers to attack her own department for making ^inaccurate^ statements about her. The entire rail network, meanwhile, is on hold for months, as Whitehall grinds through inquests and reviews.

But there may be a silver lining. The franchise documents explicitly say that the calculations that turned out to be wrong were for civil servants to make. The Department for Transport has been a shambles for years, under all recent administrations, with West Coast just the latest in a string of costly disasters, such as the Tube public-private partnership.

And the crisis may now give ministers, long frustrated with ^obstructive^ civil servants, the opening they^ve been waiting for. Just hours before the rail meltdown was announced ^ probably by coincidence, perhaps not ^ the Cabinet Office minister, Francis Maude, attacked the ^unacceptable^ behaviour of some senior bureaucrats who, he said, have ^blocked agreed government policy from going ahead or advised other officials not to implement ministerial decisions^. Maude and others want to fundamentally change Whitehall into a policy delivery, not a policymaking, operation. Ministers, they say, make the policies.

In the end, however, the most lasting effect of the Virgin rebirth will be to fuel the growing consensus that the railways cannot go on like this. The system^s effort to share risk between public and private always seems to work against the taxpayer and farepayer. One option would be to move to a ^concession^ form of franchising, as on London^s buses and many European regional railways, where the company is no more than a contractor.

Britain^s second-most important main line, East Coast, offers a more radical alternative. Three years ago, it was taken back into state ownership after the franchisee, National Express, failed to meet its ambitious revenue targets (it was too early in the franchise for government ^revenue support^ to be payable). For Branson, this ^handing back the keys^ is the ^doomsday scenario^ it has been dreadful to see what has happened on the East Coast Main Line in the past couple of years.^

In fact, however, and for the whole of the last year, the renationalised East Coast Main Line has enjoyed better punctuality than Virgin. Satisfaction, too, is up, to 89 per cent ^ just two points below West Coast. There are more seats, more passengers, a new destination (Lincoln) has been added, and last year ^ again in contrast to Branson Rail ^ the franchise earned more than ^350 million in premium payments and profits for the taxpayer. ^Handing back the keys^ has been the best thing that^s happened on the East Coast main line for years. And now Labour has started to talk about keeping it in public ownership ^ or even letting other franchises revert to the state as they expire.

That would, of course, be terrible news for Branson and FirstGroup. But it would make life a lot simpler for the rest of us.

One thing I've not seen mentioned recently is that a some stage Branson said he'ed run the WCML for "free" after the franchise expired.

What did he mean? He couldn't mean that Virgin would pay the staff hire the trains and pay Networkrail access charges out of their own funds.

The West Coast franchise disaster poses the wider question,What if?.What if Richard Branson,widely poo pooed at the time as sour grapes and a poor looser had not challenged the West Coast franchise decision in the first place ...

Robert Peston, BBC Business Editor, also mentions '18 months' in an editorial piece covering the revelation that the risk in all the bids was incorrectly assessed by the DfT. He points out that with this news FirstGroup may be less hostile to Virgin continuing to run the franchise for another 18 months.

http://www.bbc.co.uk/news/business-19881240

Maybe a LOREL type solution instead of a franchise. It would be one answer to the Wolmar question.

There is a huge difference between Lorol and the WCML, or the Great Western for that matter. Lorol is essentially a local service over a small geographic area. Service levels are prescribed by the sponsoring local authority.

Imagine a similar scenario on the Great Western. The DFT would prescribe the services and the TOC would deliver them. If my memory serves me well, that was exactly what happened at the start of the current FGW franchise, and what a disaster that was. There is no room for creativity in a "concession" contract. If the first Great Western contract had been a concession, Cardiff would still have an hourly service.

First Group were set to order new trains and run new services on the WCML - this would not happen with a concession, unless of course you believe that the DFT have the imagination and the guts to specify this as a requirement!

Concessions are good when they are for self contained service groups with a local sponsor, such as Lorol or Merseyside. But I can't see them working (for the benefit of passengers) in larger franchises.

But which local authority specifies the contract for the Great Western franchise? There'd be so many different local authorities with so many competing interests that the only appropriate body would be the DfT, and DfT micro-management is something everybody is hoping will be phased out.

MPs fear that if DOR is handed the line it will set a precedent, and the state-owned company would then have to take over the other franchises as the government reassesses its rail policy.

DOR has been operating the East Coast main line since 2009 after National Express pulled out of the franchise.

Effectively renationalising four more franchises would put around half the country^s railways into state control ^ causing a furore among Tories.

Virgin to run West Coast route 'for at least nine months'

Virgin Trains will be asked to continue to run services on the West Coast Mainline for at least another nine months after the latest decision on the route franchise was scrapped.

In a stock exchange announcement ministers said they will hold talks with Virgin for a "temporary" contract.

A competition will then be run for a new franchise agreement.

The decision to give FirstGroup the route from December was withdrawn over "technical flaws" in the bid process.

The Department for Transport told the London Stock Exchange it hoped Virgin would remain as the West Coast Mainline operator for between nine and 13 months while a competition was run for an interim franchise agreement.

This interim agreement will then run until a new long-term franchise agreement is in place.

"The government believes that this is the best way to ensure services are maintained and that there is no impact on passengers," it added.

A Virgin Trains spokesman said the move meant it was in a position to "offer customers some short-term continuity".

The competition to run the line was cancelled on 3 October and led to the suspension of other franchise programmes including bids for Essex Thameside, Great Western and Thameslink.

The government has announced two independent reviews to focus on the West Coast competition and the wider DfT rail franchise programme.

Three civil servants were suspended over the way the West Coast franchise process had been conducted and the government has said the estimated cost of reimbursing Virgin, FirstGroup and two other companies for the cost of their bids will be about ^40m.

The flaws in the bidding were discovered as the DfT was preparing to contest a legal challenge by Virgin to the decision not to award it the contract.

Transport Secretary Patrick McLoughlin said: "My priority now is to fix the problem and the first step is to take urgent action to ensure that... services continue to run to the same standard and passengers are not affected.

"I believe Virgin remaining as operator for a short period of time is the best way to do this and my officials and I will be working flat out to make this happen."

Mr McLoughlin is due to give further details on the plans in the House of Commons at 15:30 BST on Monday.

The West Coast route serves 31 million passengers travelling between London, the West Midlands, the north-west of England, North Wales and the central belt of Scotland.

FirstGroup had initially beaten current operator Virgin Trains to win the 13-year franchise.

BBC News transport correspondent Richard Westcott said the interim contract will last for two years while the longer franchise will be handed out around the time of the next general election.

The decision was a "messy solution to a mistake that is costing the taxpayer tens of millions of pounds" but the transport secretary feels it is the best way to keep services running without disruption, our correspondent added.

Ahead of the announcement, Labour warned that a decision to extend Virgin's contract could see taxpayers exposed to further legal costs.

Shadow transport secretary Maria Eagle also said it was wrong for the investigation into the bid process to be carried by a DfT non-executive director.

RMT transport union leader Bob Crow described the decision to extend Virgin's franchise as a "shabby deal" but said it was "no surprise". The RMT had been hoping the West Coast franchise would be run by the DfT in the public sector.

Meanwhile, Manuel Cortes, leader of the TSSA rail union, said: "This decision means that the long-running Whitehall farce, known as private rail franchising, continues at the taxpayer's expense."

Department for Transport to negotiate with Virgin on temporary operation of West Coast rail services

The Department for Transport will negotiate with Virgin Rail Group for them to continue providing rail services on the West Coast Main Line for a temporary period.

The current franchise is due to expire on 9 December after which it is the government^s intention that Virgin remain as operator for a short period ^ expected to be between 9 and 13 months ^ while a competition is run for an interim franchise agreement. This interim agreement, which would be open to any bidders, will then run until the new long term West Coast franchise is ready to commence.

The government believes that this is the best way to ensure services are maintained and that there is no impact on passengers.

Transport Secretary Patrick McLoughlin said:

    ^The cancellation of the InterCity West Coast franchise is deeply regrettable and I apologise to the bidders involved and the taxpayer who have a right to expect better.

    ^My priority now is to fix the problem and the first step is to take urgent action to ensure that on the 9 December services continue to run to the same standard and passengers are not affected.

    ^I believe Virgin remaining as operator for a short period of time is the best way to do this and my officials and I will be working flat out to make this happen.^

On 3 October the previous competition to run trains on this line was cancelled following the discovery of significant technical flaws in the way the franchise process was conducted.

The department also paused the on-going franchise programme including live competitions on Essex Thameside, Great Western and Thameslink and set up two independent reviews into what went wrong with the West Coast competition and the wider DfT rail franchise programme.

Notes to editors

• The Transport Secretary has ordered two independent reviews:
• The first will be an urgent independent examination into the lessons to be learned from the department^s handling of West Coast competition. Conducted by independent advisers and overseen by Centrica chief executive Sam Laidlaw and former PricewaterhouseCoopers strategy chairman Ed Smith, both DfT non-executive directors, this review will look as soon as possible at what happened and why with a view to delivering an initial report by the end of October.
• The second independent review will be undertaken by Eurostar chairman Richard Brown CBE, and examine the wider rail franchising programme. It will look in detail at whether changes are needed to the way risk is assessed and to the bidding and evaluation processes, and at how to get the other franchise competitions back on track as soon as possible. This will report back by the end of December.

Did 'brutal' cuts cause West Coast rail fiasco?

Whitehall insiders claim the Coalition's own austerity drive could have landed the taxpayer with a ^100m bill. Oliver Wright reports

More than 30 senior civil servants in the Department for Transport, including some with direct responsibility for franchising, were axed in the run-up to the West Coast Main Line fiasco, The Independent has learnt.

Documents show that dozens of directors in the department were "eliminated" as part of an aggressive cost-cutting programme, while another 400 more junior posts were closed.

Insiders believe that the speed and scale of the staff reductions ^ alongside cuts in financial consultancy spending and the introduction of a new, "fiendishly complicated" 13-year franchise agreement ^ led to the mistakes, which are set to cost the taxpayer more than ^100m. All three areas are to form part of the department's inquiry into what went wrong. Patrick McLoughlin, the Transport Secretary, will update Parliament today on the investigations into the fiasco and announce details of what will happen to the West Coast franchise after 9 December, when Virgin's contract officially runs out.

Senior department officials have been in discussions with Virgin about giving the company a temporary extension to run the line while the franchise process is rerun and two inquiries establish what went wrong. He is likely to confirm this extension today. The inquiries, whose terms of reference are also expected to be published today, will focus their attention on what Mr McLoughlin has described as "a number of serious mistakes" that were made in the franchising process.

But they are also expected to examine the wider problems in the department, including staff and consultancy cuts. Among the posts abolished in the restructuring programme was the Director of Procurement ^ whose role was to oversee the franchise agreements. The directors of Rail Strategy and Rail Contracts, both of which would have had a role in the process, were also axed.

Two other senior posts which dealt with finance were lost in the cull, which saw many responsibilities merged and teams shrunk. Hundreds more junior staff lost their jobs.

Kate Mingay, the most senior civil servant suspended for her role in the franchise decision, had previously been head of Corporate Finance in the department but as a result of the restructuring was given additional responsibilities for rail contracts, procurement and commercial services. At the same time, Department for Transport board minutes from 2010 show that senior officials believed they could have some "quick wins" by cutting consultancy spending.

However, they admitted that other cuts in external support would have "some inevitable implications on prioritisation of expert support".

In the case of the West Coast Main Line, this is thought to have included not hiring external financial consultants to do an external audit of the department's assumptions and calculations in awarding the franchise.

It is understood to be these problems in financial modelling that led to the scrapping of the decision to hand the franchise to FirstGroup ahead of Virgin Trains. One source, with extensive knowledge of the department, told The Independent: "We always thought the cuts would mean something had to give. We didn't know it would be this bad."

Another said: "The job cuts at the Department for Transport were faster and more brutal than pretty much anywhere else. They have suggested that it was all been successfully achieved. But with what we know now, you would have to question that."

The Independent understands that the staff cuts and restructuring will form part of the inquiry being carried out by the Centrica chief executive, Sam Laidlaw, and the former strategy chairman at PricewaterhouseCoopers, Ed Smith. Next month, the think tank Institute for Government is due to publish a report on the effect of the restructuring on Whitehall departments. It looks in detail at the Department for Transport, which made a decision to move faster than others in cutting staff.

Louise Ellman, who chairs the House of Commons Transport Select Committee, said her committee would want to investigate whether the department had a capability to deal with the franchise bids, which were said to be so large that the paperwork needed to be transported in vans.

"Cost-cutting is one of the areas of concern that we have," she said. "We will be looking to see how much pressure this put on the people who had responsibility for the franchising process."

Stephen Joseph, of the Campaign for Better Transport, added: "What we have heard is that the Government completely changed the nature of the franchise, cut the number of civil servants by one third and then would not allow them to employ external auditors. None of this has been passenger focused, it has all been about the bottom line."

Labour MP Maria Eagle, the shadow Transport Secretary, said: "It's increasingly evident that ministerial incompetence caused this rail franchise fiasco. It will add insult to injury if ^40m and rising of taxpayers' money has gone down the drain because of short-sighted short cuts made by ministers, designed to save money but ending up costing vastly more. This is yet another reason why we need a genuinely independent inquiry."

From cuts to crash? the story of the West Coast rail fiasco

October 2010: A spending review sets out plans to save more than ^300m a year from the Department for Transport's budget by 2012.

November/December 2010: Redundancy plan results in merging of responsibilities among staff.

November 2010: Decision to make cuts in consultants goes ahead despite fears of impact on DfT resourcing.

2011: Restructuring plans rolled out with further redundancies among more junior civil servants. Government says central department will lose 480 staff.

May 2011: Government accepts McNulty report recommending a new rail-franchising system. Draft Invitation to Tender for West Coast franchise shortlists Richard Branson's Virgin Rail, Abellio, FirstGroup and SNCF/Keolis.

May-December 2011: Detailed plans for the new franchise are drawn up by Department officials, and financial models by which the bids will be assessed are devised.

January 2012: Final bids are received and assessed by the Department.

August 2012: Justine Greening announces she intends to award the West Coast franchise to FirstGroup. Virgin demands a judicial review into the decision.

October 2012: The DfT announces the decision to award the West Coast franchise to FirstGroup has been scrapped following the discovery of flaws in the procurement process. The Transport Secretary, Patrick McLoughlin, orders two independent reviews into the matter.

Ellendune is quite correct when she he talks about reducing labour costs first without deciding what work will be cut.

I am not aware that this has been said anywhere else yet, but one of the repercussions of this fiasco would seem to be that the existing franchise holders for the franchises that are currently the subject of the suspended bidding process ....

West Coast Main Line: Rail franchise process 'was flawed'

An interim investigation into the West Coast Mail Line franchise process has found "significant errors", a "flawed process" and "inadequate planning".

The findings were revealed by Transport Secretary Patrick McLoughlin in a statement to the House of Commons. But he said his department had been "frank and open" about the mistakes.

The decision to award the multi-billion pound rail franchise to FirstGroup over Virgin was scrapped by the government on 2 October. The bidding process for the line, which serves 31 million passengers travelling between London, the West Midlands, the north-west of England, north Wales and the central belt of Scotland, was also put on hold after "significant technical flaws" were discovered.

The transport secretary said the flaws came about because of mistakes by Department for Transport staff and three civil servants were suspended.

Mr McLoughlin told MPs he received the interim report into the franchise collapse (http://assets.dft.gov.uk/publications/laidlaw-report/laidlaw-report.pdf) from Sam Laidlaw, who was commissioned by the Department for Transport to look into what happened. He said the report made "uncomfortable reading" before he outlined its findings.

In a letter to Mr McLoughlin, Mr Laidlaw wrote: "In seeking to run a complex and novel franchising competition process, an accumulation of significant errors, described in the report, resulted in a flawed process."

He added: "These errors appear to have been caused by factors including inadequate planning and preparation, a complex organisational structure, and a weak governance and quality assurance framework."

In his statement on Monday, Mr McLoughlin said there had been a lack of transparency, inconsistencies in the treatment of bidders and technical flaws in the franchising process.

"It is clear that the inquiry has identified a number of issues which confirm that my decision to cancel the franchise competition was necessary," he said.

"These include a lack of transparency in the bidding process, the fact that published guidance was not complied with when bids were being processed, inconsistencies in the treatment of bidders and confirmation of technical flaws in the model used to calculate the amount of risk capital bidders were asked to provide to guard against the risk of default.

"The Laidlaw inquiry also mentions factors "that appear to have caused or contributed to the issues raised".

Shadow transport secretary Maria Eagle said the cabinet ministers involved in the original process should take responsibility for its failures "instead of blaming officials".

"Ministers must not be allowed to shuffle off responsibility - not my words but the words of the prime minister. This isn't just a faulty process, it's a faulty government," she said.

Mr McLoughlin has previously said the estimated cost of reimbursing four companies for the cost of their bids will be ^40m.

A further report, with firm conclusions, is expected by the end of November.

Transport Committee seeks answers about the cancelled West Coast Main Line franchise competition

The Transport Select Committee calls the Secretary of State for Transport, Rt Hon Patrick McLoughlin MP, and the Permanent Secretary at the Department for Transport, Philip Rutnam, to give oral evidence on the cancellation of the competition to run the West Coast Main Line franchise. 

Announcing the session Transport Committee Chair Louise Ellman MP said:

"It is astonishing that the Government has had to cancel the West Coast Main Line franchise competition and delay other competitions. Just last month the Secretary of State told us that he was content with how the Department for Transport had handled the West Coast Main Line competition and that Virgin's challenge to the outcome would be defended robustly.

I expect the Department's review of what went wrong to be available by the end of this month and we will want to examine that very carefully. We will also want to know how much this episode has cost the taxpayer, what lessons will be learnt, and what will be the wider implications for franchising. In addition, I expect the Committee to look closely at the Government's review of franchising when it is published at the end of this year."

First Group dividend on hold after West Coast fiasco

Travel company First Group has decided to freeze its interim shareholder dividend due to the uncertainty created by the cancellation of the West Coast Main Line franchise competition.

The Aberdeen-based transport group had been announced as the winning bidder. But then the government scrapped the competition after irregularities in the tendering process came to light.

First Group's interim dividend will now be held at 7.62p. A decision on its full-year dividend will come in May. "By that time, we expect the prospects for our rail division to be clearer, following independent reviews into the cancellation of the West Coast competition and the future of rail franchising," it said in a statement.

The reviews are crucial to First Group as all four of its rail franchises expire over the next three years.

First Group had previously committed to raising the payment it makes to shareholders by an annual rate of 7% a year for three years.

The announcement that it was freezing its dividend payments came as the bus, coach, and rail company reported a disappointing first half trading statement for the six months to 30 September 2012.

While group revenues rose 2% to ^3.25bn, pre-tax profits slumped to ^8.4m, down 93.4% from ^127.8m for the same period last year.

The company said the particularly sharp fall in pre-tax profits was down to a charge for exceptional items in the first half and a one-off gain of ^73.3m in 2011 following the restructuring of its UK Bus pension scheme.

Stripping out one-off items, underlying profits fell from ^163m to ^128.7m.

First Group chief executive Tim O'Toole said: "In the short term we have to contend with the uncertainty around future rail franchises created by the Department for Transport's decision to cancel the InterCity West Coast contract and pause the current franchise competitions, following its discovery of flaws in the way it conducted its process."

First Group, which runs the First Transit, Greyhound, UK Bus subsidiaries as well as its rail division, had been shortlisted for three other franchise competitions, so the government pause has cast a cloud of uncertainty over the group's rail strategy.

Chairman Martin Gilbert said: "It has been an exceptionally difficult period in rail", adding that the company was "extremely disappointed and frustrated that our employees and our shareholders have had to endure this extraordinary series of events".

First Group's total UK bidding costs reached ^12.3m.

The Department for Transport has said it will repay the estimated ^40m costs to the four groups involved in the flawed bid process.

First Group said it was in discussions with government over its bill for its franchise bid.

The company's shares closed down 5.1% and have now dropped about 40% over the year.

Virgin is yet to sign deal for trains on West Coast rail line

An extension to Virgin Trains^ franchise to run the busiest rail line in the country has still not been signed, just under a month before its existing deal runs out.

Virgin, owned by Sir Richard Branson, was set to be given up to two more years to run the West Coast mainline while the Government recreates the tender for the multi-billion pound franchise. An earlier decision to hand the line to Virgin^s rival FirstGroup was torn up because mistakes were found in the calculations of civil servants.

Virgin today said it was still in discussions with the Department for Transport and was confident that a deal would be signed in time. The existing franchise ends on December 9.

Rail union the RMT today called on the Government not to rule out re-nationalising the line.

RMT general secretary Bob Crow said allowing Virgin to continue was not the answer, adding: ^As a result of sheer Government incompetence, right-wing ideology and desperation Richard Branson has muscled his way in to a monopoly contractor position on Britain^s biggest rail route.

^Virgin find themselves pulling the handle on a fruit machine that^s been fixed on jackpot at every spin of the reels. It^s no wonder they don^t want to leave the arcade.^

Mistakes in the original Government^s franchise process led to it refunding ^40 million to bidders. Virgin is likely to run the line for at least nine months until a new process can be started.

Virgin Trains spokesman Richard Stanton said: ^We are in positive and constructive discussions with the DfT and remain committed to continuing with our West Coast operations beyond December 9. We^ve been overwhelmed by the level of support we have received from public and our staff.^

Transport minister: "I'm looking forward to working with Bristol mayor"

Transport minister Patrick McLoughlin was in Bristol today for David Cameron's Cabinet meeting - and afterwards met bosses from First Great Western and Network Rail at Temple Meads station.

The minister said that he is looking forward to working with the city^s first elected mayor.
 
He went on to say that the problems surrounding the tendering process for the Great Western franchise should be ironed out by the end of the year.

Mr McLoughlin said: ^This is a fantastic facility and a fantastic station and there has been a big increase in demand for rail travel in recent years. It is fantastic that such a great city as Bristol is going to get a great city to match its aspirations.^

The minister said he saw the new mayor as a vital role for the city in terms of transport and business.

He said: ^It will be a great help for me to be able to speak to one individual voice in the city. The elected may will be one clear single voice that we will be able to speak to directly.

^The mayor will be a major voice for Bristol. When I want to speak to someone about transport I can go directly to Boris and hopefully it will work the same way in Bristol.^

The city has been awarded ^130 million to help pay for a new Rapid Transit System but some of the of the candidates have voiced objections to the scheme.

However, Mr McLoughlin is said he is willing to talk directly to the new mayor on a number of issues. He did not rule out moving the cash to another scheme but added that he was keen to work with the new mayor as soon as the election has been settled.

The row over the West Coast Mainline franchise has left a cloud of uncertainty hanging over the bidding to run train services between London and Bristol.

The bidding process has been put on hold after the Government was forced to admit it had made serious mistakes in the process.

Mr McLoughlin said: ^We are holding a number of inquiries which are due to report by the end of the month. The hope is that once we have the findings then we will be able to continue in the bidding process.

^At the same time we want to make sure that Bristol and the south West will continue to get the train service it deserves.^

DfT crisis deepens as union appeals to Europe

The growing crisis at the Department for Transport over the West Coast franchise collapse and an apparent stalemate over rolling stock procurement has taken a new turn, because the DfT now also faces a union challenge under European law.

The RMT said its solicitors are petitioning the European Commission with an allegation that procurement rules are being broken.

The Department has been locked in talks with Virgin Trains for almost a month about an emergency contract to keep West Coast trains running from 9 December, but so far no terms have been agreed. Industry insiders claim the DfT is in serious trouble because Virgin is the only practicable bidder and is apparently taking a tough stance.

Transport secretary Patrick McLoughlin announced on 15 October that the DfT wanted Virgin to carry on in the short term, for a period of between nine and thirteen months. He had cancelled the award of the West Coast franchise to FirstGroup at the start of the month because the DfT's processes had been revealed to involve serious flaws. Three civil servants were suspended.

The DfT intends to award two further West Coast contracts after the initial period of emergency operation is over. The first would be a short franchise of perhaps two years, to be followed by a long-term arrangement which could run until about 2026.

However, the RMT has now launched an all-out attack on the official plan to keep Virgin as the West Coast operator for the time being, claiming that by doing so the Department has breached the EU's Consolidated Directive on Public Procurement.

The union's general secretary Bob Crow said: "The current West Coast staff could have three bosses in three years with all of the uncertainty and potential for cuts to jobs, working conditions and pensions that are thrown in the mix at every twist and turn. That^s not job security, that^s gambling with people^s working lives in the name of private profit.

"If RMT, or any other union, sought to flout laws and regulations in the way that the Government are proposing over the West Coast lash up we would be dragged into court like a shot. RMT will not sit back while our members are hung out to dry by this franchise fiasco."

The DfT's difficulties are multiplying. Not only are West Coast intercity services currently in the balance, but the pivotal Thameslink rolling stock contract is also thought to be spiralling out of control, because preferred bidder Siemens has yet to confirm external funding for the ^1.4 billion deal.

The Government has tried to compensate for the financial crisis in the Eurozone by including funding guarantees in its proposed Crossrail rolling stock contract, but it cannot do this retrospectively for the new Thameslink trains because such a move would also breach European procurement law. Ministers have repeatedly claimed that financial close is imminent, but deadlines have moved back several times. The latest position, which has been supported by Siemens, is that the deal is now expected to be confirmed early in 2013.

The DfT had defended its handling of the Thameslink contract after suggestions that it had been tainted by the West Coast flaws, saying that the two processes were different, but it has now emerged that two of the three suspended West Coast civil servants were also involved in the Thameslink calculations.

An inquiry into the West Coast problems headed by Centrica boss Sam Laidlaw is due to present its final report at the end of the month, but in the meantime the crucial countdown to 9 December continues.

West Coast shambles rolls on with Virgin deal still not signed off two weeks away from end of current franchise

Rail union RMT today warned that the West Coast Main Line franchise shambles is still rolling along with the Government failing to sign off their lashed-up extension of the current Virgin deal just over two weeks away from the 9th December deadline for the end of the current deal.

Industry insiders say that Virgin have now got the DfT right over a barrel and can demand any terms that they like in the full knowledge that the Government have, for ideological reasons, ruled out the safe and cost effective option of renationalisation. 3200 WCML staff are left without any confirmation of their employment position just a matter of days away from the end of the current franchise. A further 1800 jobs at contractors associated with the contract are also left in exactly the same precarious position.

Technically, if Virgin were to now walk, the Government could be left with no one to run the services in the run up to Christmas as they are reported to have stood down the Directly Operated Railways mobilisation team.

RMT General Secretary Bob Crow said: ^3200 WCML staff, the vast majority of whom are RMT members, are left hanging by a thread without any formal confirmation as to who will be employing them in just over two weeks time. Hundreds more from associated contractors takes the total ^at risk^ to 5000. That is an intolerable position and questions needs to be asked about why this shambles is being allowed to drag on right up to the wire.

^As a result of sheer Government incompetence, right-wing ideology and desperation Richard Branson has muscled his way in to a monopoly contractor position on Britain^s biggest rail route where he can extract whatever price he demands in the full knowledge that this shower of mugs have left themselves with no Plan B. So much for Virgin^s PR pledge to run the services for nothing in the interim after the First Group bid collapsed into chaos.

^A month away from the end of the current franchise, Virgin find themselves pulling the handle on a fruit machine that^s been fixed on jackpot at every spin of the reels. It^s no wonder they don^t want to leave the arcade.^

^For the thousands of staff, they are left in the run up to Christmas without any certainty at all as to what the immediate or long term future holds. With two more franchise rounds planned they could end up with three different bosses in three years with attacks on jobs, working conditions and pensions at every turn. The fight for full renationalisation of the railways, and an end to this casino-franchising, goes on.^

An official announcement on the terms of Virgin's new west coast deal is expected within the next eight days, when McLoughlin is also due to unveil the findings of Sam Laidlaw's inquiry into what went wrong in the franchising process. Virgin's contract extension is expected to last until February 2014.

Suspended Department for Transport worker takes legal action

A civil servant suspended following the West Coast rail franchise fiasco is to take legal action against the Department for Transport.

Kate Mingay was one of three officials suspended in October after the government scrapped its decision to award the franchise to FirstGroup. Mrs Mingay, DfT's commercial and technical services director, has said her role was "inaccurately" portrayed.

An independent review into the franchise process is due shortly.

The government scrapped its decision to award the multi-billion-pound West Coast Main Line rail franchise to FirstGroup after "significant technical flaws" were discovered in the bidding process.

An independent inquiry headed by senior business figure Sam Laidlaw was set up, and has already issued some initial findings. It said that "an accumulation of significant errors... resulted in a flawed process".

Mr Laidlaw, who is a non-executive director of the DfT, is due to give evidence to the House of Commons transport committee next week.

Following her suspension last month, Mrs Mingay issued a statement saying: "'While it has been widely reported in the context of the award of the franchise for the West Coast Main Line that I have been suspended, my role has been inaccurately portrayed, mainly due to statements and other comment made by the Department for Transport itself.

"I would like to make it clear that I did not have lead responsibility for this project. Neither I nor any member of my team had any responsibility for the economic modelling for this project or for any Department for Transport project. Nor did I have any responsibility for the financial modelling in respect of this project."

It is believed that a court hearing relating to her case will take place on Thursday.

This will be great business for lawyers.

Kate B should be commended. This government (and past ones) seem to think that public servants just sit around for much of the day gossiping and drinking tea

We mainly have coffee where I work

Storm in a teacup if you ask me....

I think these puns are beginning to make a mocha-ry of this topic.

Is everyone on this forum under the influence of drink?

Laidlaw report stays under wraps after legal move

The final report into the reasons why the West Coast franchise competition collapsed is staying under wraps for now, because one of the three DfT civil servants suspended on 3 October is taking her grievances to the High Court today.

Kate Mingay is alleging that her suspension was unjustified and damaging to her career.

The final version of the Laidlaw report is reported to have been supplied to the DfT slightly ahead of time and was due to be published tomorrow, but transport secretary Patrick McLoughlin has decided to keep its contents secret while legal uncertainties exist, and particularly while there remains a possibility that other legal claims could be made.

The West Coast crisis is still far from resolved in any case --- particularly because no agreement has yet been announced with Virgin Trains about the terms of an emergency operating contract, which needs to start at 02.00 on Sunday week -- 9 December -- if West Coast intercity trains are to keep running.

Virgin has been locked in talks with the DfT since 15 October, after the Department for Transport apparently abandoned its alternative plan to bring in a management team from its own subsidiary Directly Operated Railways.

The House of Commons Transport Committee is set to hear evidence about the latest West Coast developments from the transport secretary and his permanent secretary Philip Rutnam next week, but the legal challenge has cast doubt about much detail they will be willing to give to MPs, at least for the time being.

Virgin Trains to run West Coast Mainline for extra 23 months

The government has announced Virgin Trains will run the West Coast Mainline for a further 23 months - hours before a report into the collapse of the line's franchise deal is published.

An inquiry has examined why the ^5bn deal collapsed in October.

First Group was initially told it had won, but the tendering process was halted because the Department for Transport made numerical mistakes.

Monday's temporary deal means Virgin will run trains until 9 November 2014.

The government said the Department for Transport would be able to shorten the 23-month period "by up to six months if a subsequent franchise can be let on a shorter timescale".

Transport Secretary Patrick McLoughlin also announced a new hourly service between Glasgow and London, adding: "We are determined to ensure not only that passengers continue to experience the same levels of service they have in the past, but that services improve."

The BBC understands Mr McLoughlin is expected to make a statement to the Commons on the West Coast franchise at 11:30 GMT.

The Department for Transport was forced to scrap the original bid to run trains between London, Manchester and Glasgow because of the miscalculations. Three officials are still suspended.

The inquiry into the collapsed tendering process was led by Centrica chief executive Sam Laidlaw.

The first report from Sam Laidlaw, last October, talked of officials not following their own guidelines, not treating the bidders equally, failing to include inflation in their figures and ignoring warnings of possible problems months before the deal capsized.

According to BBC transport correspondent Richard Westcott, this latest, and final report by Mr Laidlaw will cast more light on why it all went wrong, but is unlikely to name names.

That has been left to another inquiry, which has been completed, but will not be made public.

Mr Laidlaw had been due to appear before the House of Commons Transport Select Committee this week, but he will now give his evidence on 18 December.

The general secretary of the Rail, Maritime and Transport Workers union, Bob Crow, said there had been a "reckless high-wire act that has taken the negotiations between Virgin and the DfT right to the very brink".

"Because of the shocking ineptitude right at the top of this rotten government, Sir Richard Branson has muscled his way into a monopoly provider position and him and his Virgin Trains shareholders will be laughing all the way to the bank.

"The case for renationalisation of Britain's railways is now overwhelming."

So Laidlaw has finally been published and is unequivocal about where the blame lies: within the DfT.  I believe the removal of so many committed and experienced railway men and women (some of whom transferred in from the Strategic Rail Authority when it was disbanded) in the cull of the civil service at the beginning of this government's tenure could not have helped in maintaining continuity and knowledge essential to running the franchise process.  Civil service practice seems to be against staying in one sphere for long so long-term experience is missing.  I have no idea about the background of the three civil servants removed when the ordure and spinning machine first collided in October, but I do know that some of those given their marching orders previously (redundant they were told) had considerable experience in the administration of railways and cared about the service provided.  Sometimes we only know the value of what we have lost when it's too late.

(I am not a redundant or any other kind of civil servant!)

West Coast Mainline deal failure criticised

A report into the collapse of the ^5bn West Coast Mainline franchise deal has blamed a "damning failure" by the Department for Transport (DfT).

The Laidlaw report was published hours after the government announced Virgin Trains will run the service for another 23 months - until 9 November 2014.

FirstGroup was told it had won the bid in August. The government scrapped that decision in October because of numerical mistakes - at a cost of at least ^40m.

The mistakes came to light after bidder Virgin Trains, which had run the West Coast Mainline since 1997, launched a legal challenge against the decision.

Three senior civil servants at the DfT, who were suspended after the scrapping of the bid, can now return to work. One of the officials, Kate Mingay, launched a legal action against the department last week, saying her role had been "inaccurately" portrayed.

The independent inquiry into the collapsed tendering process was led by Sam Laidlaw, chief executive of Centrica, the owner of British Gas. He said on Thursday his report had revealed "a lack of transparency, inadequate planning and preparation, as well as a complex and confusing organisational structure with weak quality assurance and insufficient governance oversight".

Transport Secretary Patrick McLoughlin, revealing the report's findings to MPs in the Commons, said it made "extremely uncomfortable reading" for his department. He said there was a "damning failure" by the DfT which had to be put right. The report had found "serious problems" and "unacceptable flaws", he said.

But Mr McLoughlin cited Mr Laidlaw's findings that ministers had been given inaccurate reports and they had awarded the contract without being told about flaws in the bidding process.

The transport secretary said the investigation by Mr Laidlaw - who will give evidence to the House of Commons Transport Select Committee on 18 December - found department officials "wrongly calculated the amount of risk capital bidders would have to offer to guarantee their franchise proposals".

"These incorrect figures varied in ways which were wrong," he said.

In his report, Mr Laidlaw also noted constant changes of permanent secretary at the DfT and said resources were "excessively stretched due to the government's spending review and the competing pressures of other projects".

Mr Laidlaw's initial findings, revealed in October, talked of officials not following their own guidelines, not treating the bidders equally, failing to include inflation in their figures and ignoring warnings of possible problems months before the deal capsized.

BBC transport correspondent Richard Westcott said that, while Mr Laidlaw's final report had not named names, another completed inquiry by Eurostar chairman Richard Brown - the results of which are yet to be made public - would do just that.

A spokesman for FirstGroup said the report reiterated that it was not at fault and it hoped Mr Brown's review would "provide certainty and confidence in the future of rail franchising".

"It is especially disappointing that passengers and taxpayers will not see the benefits that our successful bid would have delivered," he added.

Virgin Rail Group chief executive Tony Collins said the firm would provide an "even better service" on the West Coast Mainline now that it had been allowed to run the service for another 23 months.

TSSA rail union leader Manuel Cortes said the "long-running Whitehall farce that is rail franchising just gets more ludicrous by the day".

"So we have spent ^40m of taxpayers' money on a franchise which has stayed with Sir Richard Branson anyway," he added.

But rail customer watchdog Passenger Focus welcomed the Virgin Trains development saying passengers would "welcome the stability this deal will bring".

And Association of Train Operating Companies chief executive Michael Roberts said passengers and the rail industry would now have clarity about the next two years on the West Coast line and urged ministers and officials to "get the programme of franchising back on course".

Shadow transport secretary Maria Eagle said the Laidlaw inquiry had delivered "a damning verdict on the government's shambolic and incompetent handling of rail franchising since the election".

And Rail, Maritime and Transport union general secretary Bob Crow said that, "because of the shocking ineptitude right at the top of this rotten government, Sir Richard Branson has muscled his way into a monopoly provider position".

The Public and Commercial Services union, meanwhile, which represents one of the three suspended civil servants, said the report confirmed the issues involved in the bid were "very complex". It said it was "disgraceful, but not out of character for this Tory-led government, how quick ministers were to try to pin the blame on civil servants".

Lessons from cancelling the Intercity West Coast franchise competition

The Department for Transport competition to let the Intercity West Coast franchise lacked management oversight and the governance of the project was confused, according to the National Audit Office. The spending watchdog has concluded that the full cost to the taxpayer is unknown but likely to be significant, with at least ^1.9 million in staff and adviser costs, ^2.7 million in legal costs and ^4.3 million on external advisers for the reviews that it has commissioned.

The report identifies five essential safeguards against poor decision making in major projects. These are necessary to enable officials to assure Ministers and Parliament that decisions are sound and are value for money. However, in the case of the Intercity West Coast competition, none of these lines of defence operated effectively.

The refranchising process was a major endeavour, with considerable complexity and uncertainty. Nevertheless, the objectives of the Department for Transport were insufficiently clear during the franchise competition. The Department delayed the issuing of the invitation to tender by eight months because it had not finalized how it would implement recent policy changes, such as operators being responsible for stations. There was also confusion among Department staff about some aspects of the process.

The subordinated loan facility was a particular area of confusion. A subordinated loan is capital provided by the parent company which guarantees franchise payments will be made to the Department should the franchisee get less passenger revenue than expected. However, there were significant errors in the tool the Department used to calculate how big a loan it would require bidders to have. The model had been designed to inform internal discussions and received no extra quality assurance once the Department decided to use it to calculate the loan, a key commercial decision.

The competition lacked strong project management and there was no clear route for the project team to get approval for major issues in the project. No one person oversaw the whole process or could see patterns of emerging problems. In addition, there has been considerable turnover in senior positions in the Department. It has had four permanent secretaries in two years and changes of Directors General.

Amyas Morse, head of the National Audit Office, said today: ^Cancelling a major rail franchise competition at such a late stage is a clear sign of serious problems. The result is likely to be a significant cost to the taxpayer. The failure of essential safeguards raises questions about the Department^s broader management approach, as well as this specific matter.

^It is commendable that, once it uncovered the problems on the franchise, the Department sought to be open about what happened and to investigate further. Among the lessons to be learnt is that staff with line-management responsibilities should be clear that assurance processes are not a substitute for proper supervision and management controls.^

Four Track Now ! really does have an eye-wateringly turn of phrase at times..... ::)

Ah ... he's from plain-speaking 'up North' ...  :D

West Coast Rail fiasco probe 'cost ^3.2m'

An inquiry into the collapse of the West Coast mainline franchise deal cost taxpayers ^3.5 million, the Government has said.

Businessman Sam Laidlaw's review of the botched decision to award the contract to First Group, which was later scrapped pending a High Court appeal, took seven weeks.

His investigation found "serious problems" and "unacceptable flaws" with the way the Department for Transport granted the contract before it was forced to overturn its decision and ask Sir Richard Branson's Virgin Rail to continue running services on the London to Edinburgh route until November 2014.

It also emerged that Mr Laidlaw was not given full access to emails about the bids.

The flawed franchising process was estimated to have cost taxpayers at least ^40 million before the announcement of the cost of the official investigation.

Transport Minister Simon Burns admitted that the total bill could be even higher. "The costs of the Laidlaw Inquiry are yet to be finalised as not all of the invoices have been received. The department's best estimate of the final costs of the Laidlaw Inquiry is ^3.55 million," he said.

Mr Burns also revealed that Mr Laidlaw did not see all correspondence surrounding the ^5 billion deal. "There was insufficient time for a full email capture and review to be carried out by the Laidlaw Inquiry team due to time pressures," Mr Burns said in written answers to Parliamentary questions tabled by shadow transport secretary Maria Eagle.

"However, the inquiry team did review a number of emails made available by the department, including emails captured for the purpose of the department's human resources' investigation. In his report, Sam Laidlaw states that he is satisfied that he was provided with a proper evidential basis for making the findings set out in his report."

Transport chief Peter Strachan quits after rail bid blunder

The West Coast rail bid fiasco has claimed its biggest civil service casualty with the departure from the Department for Transport of Peter Strachan, its head of major projects.

Mr Strachan, who was one of the senior officers responsible for the bid, left as part of a restructuring that also saw Kate Mingay moved to a different job and a new division created to oversee future rail franchise competitions.

Ms Mingay was one of the three officials temporarily suspended on October 3 after Transport Secretary Patrick McLoughlin pulled the auction for the London-to-Scotland line after finding "unacceptable mistakes" in the DfT's handling of the bid.

Questions had been raised over Mr Strachan's position after the department's permanent secretary Philip Rutnam announced earlier this month that the DfT was seeking to appoint a new director general of rail, combining both "policy" and "delivery" of rail projects. That covered some of Mr Strachan's current job.

Clare Moriarty, currently director general, corporate at the DfT, will head up the new rail franchising division from the new year.

Mr Strachan's major projects wing employed 193 staff and had a budget for 2012/13 of ^3.88bn, according to a DfT organisational chart published earlier this year.

Mr Strachan also played a pivotal role in liaising with the train operators, though he raised eyebrows in the industry when he pre-empted the report by Centrica boss Sam Laidlaw into the West Coast shambles by sending bidders detailed accounts of his own version of events.

Letters running to more than 10 pages sent to FirstGroup and Virgin Rail put the June 27 meeting of the Contract Awards Committee at the centre of events and complained of "stark inconsistencies" in the accounts of officials.

The meeting, chaired by Ms Mingay, determined the size of the subordinated loan facility (SLF) ^ the amount bidders pledged against the risk of them walking out on the contract ^ with "winning" bidder FirstGroup putting up ^190m.

Mr Strachan wrote in his letter: "As a result of our investigations, it became apparent that the Department departed from its stated procedures ... in establishing the level of the SLF. The amount of SLF sought from at least some bidders was substantially too low as a result."

While many of his findings were backed by the Laidlaw investigation, his motivation for writing a letter that largely exonerated himself from any blame was questioned in the industry. A DfT spokesman said the letter had been written as a "matter of courtesy" to bidders.

Ms Mingay, who went to the High Court following her suspension in an attempt to be reinstated, was the DfT's director, commercial and technical services. She is understood to have been moved to the Crossrail project team.
A DfT spokesman said: "As a consequence of restructuring, Peter Strachan has decided to move on from the DfT. We wish Peter all the best in his next role."

So the new head of rail franchising has lots of experience at the Department of Health.  That should be very useful.  Obviously an expert of the rail industry.  I thought this merry-go-round was part of the problem.

^corporate functions - finance, HR, property, corporate procurement, IT, communications, shared services
^change management
^corporate governance
^internal audit
^performance management of DfT^s motoring agencies

Shuffling of the deckchairs at the DfT has seen a high ranking Sir Humphrey fall on his sword.

A new bidder has emerged for West Coast: http://www.theregister.co.uk/2013/01/09/bigjigs_bid/

Nice that someone at Dft took time to write a reply. Shows someone has a sense of humour.

West Coast rail: MPs not 'deliberately misled'

Civil servants did not "deliberately" mislead ministers during a bidding process to run the West Coast mainline, the transport secretary has told MPs.

Patrick McLoughlin said lessons had been learned from mistakes made during the franchise competition. But he added the civil servants had not applied "proper workmanship" during the scrutiny process.

FirstGroup was awarded the contract for the 13-year rail franchise ahead of Virgin, but it was abandoned last year.

Investigations found a "damning failure" by staff at the Department for Transport (DfT) led to ministers - who had not been told about flaws in the bidding process - awarding the contract based on inaccurate reports.

The mistakes came to light after rival bidder Virgin Trains, which has run the West Coast Main Line since 1997, launched a legal challenge against the decision.

Mr McLoughlin faced questions on Monday from the House of Commons transport committee, chaired by Louise Ellman. When asked whether ministers had been "deliberately misled" by civil servants, Mr McLoughlin replied: "I don't think they were deliberately misled. The matter did not involve the proper workmanship you would expect from civil servants. Most of them thought they were acting in good faith, but they were not."

The transport secretary then praised the work done by his DfT staff, saying he had a team of "first-class civil servants doing a tough job".

Mr McLoughlin also revealed the cost of the failed process and future compensation payments for the bidders was approaching ^45m and could rise further.

He added that he expected to publish the Brown report - the second of two external investigations - within the next few days. The report is investigating what implications the West Coast debacle has for the future franchising programme.

Other franchising competitions, including for Essex Thameside, Great Western and Thameslink, are currently suspended.

Virgin will continue to run rail services along the West Coast mainline until November 2014.

Justine Greening to face criticism over West Coat Main Line fiasco

Justine Greening, the Cabinet minister, will face criticism this week over her role in the collapse of the ^5billion West Coast Main Line rail franchise.

A report by the The Transport Select Committee published on Thursday will find fault with Miss Greening for her oversight of the deal, which fell apart in October at a cost to the taxpayer at least ^40million.

The MPs will also highlight failures by civil servants at the Department for Transport and suggest that awarding rail franchises should be handed to a new independent body staffed by experts.

There will also be criticism of the ^revolving door^ of ministers and civil servants at the department. The Coalition had three transport secretaries within 17 months.

Ministers announced that First Group won the London to Birmingham, Manchester, Liverpool and Glasgow franchise back in August last year. However, Virgin Trains, which had operated the line for 15 years challenged the decision.

Two months later the deal with First Group was withdrawn and the department later admitted to serious mistakes with the way the contract was awarded. Three civil servants were subsequently suspended.

Ms Greening, who had been tipped for high office, lost her job as transport secretary a month later in the Cabinet reshuffle. She was moved to the Department for International Development, but remains in the Cabinet.

An earlier report into the aborted rail franchise by Sam Laidlaw, the chief executive of the energy company Centrica, found the DFT had shown ^a lack of transparency, inadequate planning and preparation, as well as a complex and confusing organisational structure with weak quality assurance and insufficient governance oversight^.

Patrick McLoughlin, the current Transport Secretary, has said there had been ^unacceptable flaws^ and ^serious problems^ with the way the franchise had been awarded.