Virgin in running for GNER route

Sir Richard Branson's rail firm yesterday confirmed it will enter the running to take over the East Coast Main Line franchise.

A Virgin train

Sir Richard Branson's rail firm yesterday confirmed it will enter the running to take over the East Coast Main Line franchise.

The new contest to run the route, which links the North-East to London and Scotland, was triggered last month when GNER surrendered its franchise due to financial difficulties.

Yesterday, Virgin Trains said it has registered its interest in running the line as part of a 50-50 partnership with transport company Stagecoach.

Virgin was one of the unsuccessful bidders when GNER secured the franchise for a minimum of seven years in 2005.

However, it gave up the contract when financial pressures meant it could no longer keep up its £1.3bn premium payment to the Department for Transport.

GNER is currently running the route under a management contract, with the DfT taking responsibility for the bulk of the financial risk and profit.

A spokeswoman for Virgin Trains said yesterday: "We are interested and we will be putting in an expression of interest, but that's all there is to say at the moment."

Success for Virgin would see it dominate the North-South rail market, as it already runs the West Coast route joining Cumbria to London and Scotland, and the Cross Country franchise which links the North-East to the Midlands and South-West.

Martin Murphy, chairman of pressure group Railfuture North-East, said last night: "I would have been surprised if they hadn't put in an expression of interest.

"Of the possible contenders, they're one of the better ones. It has to be recognised that they've done a good job on Cross Country, so I certainly would be happier with them than some others." But he said the main issue is what future for the route the DfT specifies in its invitation to tender document.

Last month, Will Whitehorn, head of corporate affairs at Virgin Group, said he expected the Government would request extra investment in trains from the successful bidder.

He also said GNER's bid in 2005 had been up to £400m higher than its rivals, and declared: "It's hard to see that price being matched this time around."

The deadline for expressions of interest is January 15. Shortlisted bidders will be announced in February, and the tender document issued to them in March.

The deadline for submitting bids will be June, with the successful firm announced next summer, ready to start operating the franchise by the end of the year.

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