Virgin

Kiran Stacey

This post originally attributed the statement to Justine Greening, the transport secretary. It was actually issued by her ministerial colleague, Theresa Villiers. Apologies.

Justine Greening Theresa Villiers has just announced she has not signed a contract with FirstGroup to run the West Coast mainline as she was expected to do last week because of the legal challenge from Virgin Trains. Here is the transport minister’s full statement (emphasis mine):

On the 15 August 2012 the Department for Transport announced to the London Stock Exchange that it intended to award the InterCity West Coast franchise to First West Coast Limited, a subsidiary of First Group.

Bids were received from Abellio InterCity West Coast Limited – NV Nederlandse Spoorwegen, First West Coast Limited – FirstGroup plc, Keolis/SNCF West Coast Limited – Keolis SA and SNCF, Virgin Trains Limited – Virgin Group Holdings Limited.

 

Kiran Stacey

Sir Richard Branson showed his genius for fuelling a story today when he offered to run the West Coast line for several months without making a profit to let ministers have more time to review their decision to strip the franchise from his company Virgin Trains.

 

 

Sir Richard Branson

Sir Richard Branson

Writing the the Sunday Telegraph, Sir Richard said:

It is far better for MPs to have the chance to debate the issues, and question ministers on the detail before the decision is finalised. To assist in this process, there should be an independent audit of the department for transport decision to ensure it has been based on correct criteria and reliable forecasting of customer numbers, revenue and payments to government.

If this process means extending the current franchise beyond December for a few months, I and my partners at Stagecoach would happily run the extended franchise on a not-for-profit basis, or donate profits to charity. We must ensure that this crucial decision is taken with all the facts correctly assessed and understood.

 

Jim Pickard

Eagle-eyed readers may have noticed a discrepancy in the press releases issued this morning by UKFI and by Virgin on the sale of Northern Rock.

In the UKFI announcement there was no mention of Wilbur Ross, the US billionaire, or his company. By contrast the press release from Virgin Money says explicitly: “The acquisition is funded by an investment consortium led by Virgin Group and WL Ross & Co.”

It seems ministers are keen for Sir Richard Branson to be the smiling face of the deal, rather than the man dubbed by Fortune Magazine the “King of Bankruptcy”.

So who is Ross? He is a very canny financial investor who has made a speciality out of distressed assets. Recently he was part of a consortium which saved Bank of Ireland from full state ownership by taking a combined 35 per cent stake through rights issues: that consortium was made up of Fidelity Investments, Fairfax Financial Holdings and WL Ross & Co.