Virgin could lose rail franchise
Aug 12 2012

Sir Richard Branson could lose his West Coast rail franchise this week, with a transport union warning that the switch in ownership could mean higher fares, poorer services and job losses.
The Government is due to announce the winner of the bidding for a new West Coast franchise in the next few days.

It is thought that Sir Richard's company Virgin Trains has lost out to transport giant FirstGroup in the battle to operate the London to Scotland line on which tilting, high-speed Pendolino trains run.

The Government announcement comes as the rail industry comes to terms with the need to comply with cost-cutting recommendations made in a Whitehall-commissioned report by Sir Roy McNulty.

The RMT transport union is opposed to the McNulty views and very concerned about the West Coast situation.

RMT general secretary Bob Crow said: "Whoever wins the West Coast route next week, and all the signs point to FirstGroup, they should be left in no doubt that we will mount a massive industrial, political and public campaign to stop any attacks on our members' jobs and the services that they provide to the travelling public.

"From leaked figures it is clear that this franchise is being let on pure McNulty terms with a gold-plated, 12-year contract linked to massive cuts to jobs and passenger services and huge increases in fares as the winning bidder battles to extract every penny that they can in profit."

FGP have done really well since just before going ex-divi, putting on 40p+ and with the divi of 16p gives a 25% ish return quick time. Is this going to be a case of better to travel than arrive.
2517

From "This is Money"

Sir Richard Branson’s Virgin Rail Group is preparing to launch a legal fightback if, as expected, it is stripped of the lucrative West Coast rail franchise this week.
Virgin is resigned to losing the London to Glasgow franchise it has held for the past 15 years. The Department for Transport is expected to hand the franchise to transport company FirstGroup.

Several leaks have suggested that FirstGroup has bid between £6.5billion and £7billion for the 14-year contract, which would be as much as 20 per cent more than Virgin is understood to have tabled.


Sources close to Virgin said lawyers were examining points on which they might win a judicial review of the bidding process – including whether the evaluation has given enough weight to public service. The decision over the awarding of the franchise will be announced on Tuesday.

The two other contenders – Abellio of the Netherlands and the French Keolis/SNCF – are understood to be out of the bidding.

GS put FGP on conviction buy list with tp raised 20% to 360p. Hang on tight bb and skinny.
2517

Took my profit at 260p as safety shot. i reckon they'll stick with virgin.......better the devil you know ect ect.

Statement re Rail Franchise Award FIRSTGROUP WELCOMES AWARD OF INTERCITY WEST COAST RAIL FRANCHISE

Delivering benefits for passengers, value for taxpayers, opportunities for
employees and returns for shareholders

FirstGroup, the leading transport provider in the UK and North America, is
delighted to have been awarded the contract by the Department for Transport
("DfT") to operate the new InterCity West Coast rail franchise until 2026.

Just gone short @264

You think the good news is already in the price?

I'm not sure it is good news.

glad i took the 260p :)

Nice move BB.

Tim O'Toole, Chief Executive of First Group, was just on radio 4 - and he sounds like he lives up to his surname!

lol

"Tim O'Toole, Chief Executive of First Group, was just on radio 4 - and he sounds like he lives up to his surname!"

Yes Skinny, He did sound a bit of a "Gun Nutter from across the water".. sort of bloke! didn't he? -):

Well the travelling was certainly better than the arrival, good exit bb.
2517

Thank you 2517, makes a change for something to go right. Just need halfords to pick up a bit more now.,.

aarrrggghhh You promised not to mention them.
2517

I know the day isn't over, but that looks like a bearish engulfing candle!