Virgin retains rail contract until 2017

Virgin Trains will keep hold of the West Coast Main Line contract until 2017, having initially lost out in the bidding war to FirstGroup.

Sir Richard Branson’s company has been operating on the line since 1997, before the government accepted a £7bn tender from FirstGroup last autumn. However, the entrepreneur wrote to David Cameron highlighting inconsistencies in both the winning bid and the process, causing the Department of Transport to later backtrack and apologise.

The government initially extended Virgin’s contract until 2014 whilst it addressed the ‘serious flaws’ in its previous tender process, and has now extended the offer until April 2017.

The West Coast Main Line carries passengers from London to Edinburgh, and is one of Preston’s busiest transport hubs. Virgin says it has increased passenger numbers from 13m to 31m per year since 1997, and introduced high-speed, tilting trains.

FirstGroup promised lower fares, faster trains and better connectivity between Lancashire’s towns and the rest of the UK when it took over operation, but the figures promised were thought to be unworkable.

Transport secretary Patrick McLoughlin said: “Franchising has been a force for good in the story of Britain's railways, transforming an industry that was in decline into one that today carries record numbers of passengers.

"Above all, in future franchise competitions, we are placing passengers in the driving seat by ensuring that their views and satisfaction levels are taken into account when deciding which companies run our railway services.”