The Government announced earlier this week that it was nationalising the London-Edinburgh franchise, after National Express said it expected to default on its obligations some time this year.
National Express had been licensed to run the franchise until 2015, but the East Coast line will now be placed in public ownership, with the Government planning to tender for a new franchisee from the end of 2010.
Sir Richard Branson, Virgin Group founder, commented: ‘Should the East Coast franchise go into default, the Government has made the right decision to take it back.
‘If you bid for a car, a painting or a house and can't pay for it, it always reverts back to the under-bidder or the owner. A train franchise should be no different.
‘I would encourage the Government to re-let this franchise as soon as is possible; but also use it as an opportunity to look again at the franchise system and ensure some level of innovation, financial robustness and quality is built in.
‘We have been the under-bidder on three different occasions, spent £15m in the process and lost to people who have put in unrealistic bids. This cannot be right.’
Virgin Trains is the brand name of Virgin Rail Group, which is owned 51% by Virgin Group and 49% by Stagecoach.
It has operated the West Coast franchise since 1997; the current franchise runs to March 2012.
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