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United Kingdom to renationalise East Coast train line

United Kingdom to renationalise East Coast train line

"Today's decision should not detract from the hard work and dedication of our people at Virgin Trains East Coast, who have been central to the transformation we have been delivering for our customers over the past three years".

From June 24, VTEC is to be replaced by the London North Eastern Railway brand, evoking the name of the company which ran the East Coast Main Line prior to nationalisation in 1948.

The decision to temporarily bring the line back into public ownership is politically embarrassing for the Government, which has repeatedly defended the private franchise model for the railways.

Stagecoach along with Virgin had been negotiating a new contract with the Department for Transport.

Virgin Trains East Coast- a joint venture between Stagecoach and Virgin- had won the right to operate the franchise between London and Edinburgh for eight years in 2014.

The transport secretary's announcement was unprecedented for the industry, with many expecting him to allow Stagecoach to continue running services under a not-for-profit agreement.

The public transport operator said the UK Department for Transport has chose to appoint "Operator of Last Resort" for the East Coast train service and is "no longer considering" entering into a new franchise contract due to heavy losses incurred by Stagecoach and Virgin.

Stagecoach Group chief executive Martin Griffiths said: "We are surprised and disappointed that the Department for Transport has chosen not to proceed with our proposals".

Chris Grayling on a visit to York last week
Chris Grayling on a visit to York last week

Transport Secretary Chris Grayling told parliament the East Coast Main Line franchise would be halted after it made considerable losses under a private company.

"This is one of the areas where we can supplement public investment, of which we're putting a record amount in the next five years, with private investment that can unlock the potential of digital technology to create even more capacity on our railways".

"After three shambolic private sector failures on the East Coast the message should now sink in that these cowboys can not be trusted and should be locked out of the system on a permanent basis".

He expected the majority of the enhanced services planned by Virgin and Stagecoach for delivery by 2023 to be implemented by LNER, although this would largely depend on the ability of infrastructure manager Network Rail to deliver them.

"I plan to use a period of operator of last resort control to shape the new partnership", said Mr Grayling.

In February Mr Grayling said the franchise would only be able to continue in its current form for a "very small number of months" as Stagecoach had "got its numbers wrong" and "overbid".

All tickets booked with Virgin Trains East Coast will be valid on all London North Eastern Railway.