Even DfT had doubts on Virgin East Coast revenue

OFFICIALS from the Department for Transport have admitted they thought the Virgin Trains East Coast franchise bid had very ambitious growth predictions.

The admission came during the latest round of evidence being given to the Transport Select Committee over the failure of the VTEC franchise.

Virgin East Coast gives way to LNER: With chance split-second timing, Virgin East Coast Class 43 power car No. 43313 powers past Offord D’Arcy (Cambridgeshire), the 06.05 Leeds-London Kings Cross, as LNER branded Class 91 No. 91105 approaches with the 07.30 Kings Cross-Edinburgh on July 16. AUBREY EVANS

Simon Smith, director of passenger services at the DfT, told the committee: “We thought Virgin Stagecoach’s bid was quite ambitious a the time. We expected when we evaluated their bid that revenue would be lower than they forecast.

“They had attributed quite ambitious growth to certain initiatives, including their marketing and pricing strategy. We thought they would get some of that, but we didn’t think they would get all of that.”

Also giving evidence was Rail Group director general Polly Payne, who added: “We want ambitious bids because they maximise the revenue we get for the taxpayer, but we also want to ensure that if things don’t work out, we make sure both passengers and taxpayers are looked after.”

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