Rail service to be renationalised temporarily after Virgin and Stagecoach could not meet payments
The East Coast rail service will be temporarily renationalised, the government has decided, after operators Virgin and Stagecoach could no longer meet the promised payments in the £3.3bn contract.
The London-Edinburgh-Inverness service will be taken back into public control on 24 June, a little over three years since Virgin Trains East Coast (Vtec) started running. It will be rebranded as the London and North Eastern Railway.
Transport secretary Chris Grayling’s decision was surprising given his vehement opposition to public control of rail. But he said the move was partly to expedite the planned east coast partnership, which would see a contract re-let to a private firm in 2020. However, several train companies – such as South Western, TransPennine Express and Greater Anglia – face similar struggles to Stagecoach and Virgin after overbidding for franchises and events may yet force his hand again.
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