Virgin Trains and Stagecoach shared a £51.2m payout from the West Coast Main Line franchise, it has emerged.
Together, Virgin Trains and Stagecoach own the West Coast Main Line franchise operator – Virgin Rail Group. The Group’s dividend for 2017/18, was almost double that received by shareholders in 2015. The dividend was paid just prior to Virgin Trains and Stagecoach handing back another rail franchise – the Intercity East Coast.
Virgin Trains East Coast (VTEC), had its contract terminated in June 2018, due to major shortfalls in revenue and passenger numbers. The collapse of the East Coast franchise cost the Government £2.3bn in lost payments.
The Transport Select Committee attributed “prime responsibility” for the franchise failure to VTEC. The Committee’s report, published in September 2018, said the financial position had been “bleak from day one.” VTEC had made “unprecedented” forecasts of 10 per cent annual growth in revenue. MPs found that the Department of Transport (DfT) had encouraged overbidding. The department bore some responsibility for the failure and had not conducted due diligence on bids.
Source: BBC News