WHAT A WAY TO RUN A RAILWAY

Others have already posted on this, so no great detail here, but I couldn't let it pass without wee word.

When the government announced a few weeks ago that the West Coast Line franchise was to be taken from Virgin and given to First, and Branson kicked off about it, the MSM invited "railway experts", economists and the like, to comment on the extremely low cost of the winning bid.

Their opinions ranged from the "rather difficult to see how they will manage to perform to the required level" to the  "it's utterly laughable". 

I don't remember one single commentator indicating that it was a reasonable bid. Only the English Secretary of State for Transport (who has oversight of cross border transport) was adamant that this was a good deal for taxpayers and travellers alike. 

(Fat chance, we all thought.)

Now, a day before a judge was due to hear evidence at the judicial review called for by Richard Branson ('with whom, don't mess', goes the advice in business circles), the Department For Transport has admitted that there were fundamental flaws in the bidding process and that therefore the whole thing will have to start over again from zero.

The details, given at the time, that suggested that First's figures were predicated on the assumption of a 10% increase in business year on year over  the 15 year life of the contract, raised most people's eyebrows! But it now appears that the executives of the DFT had forgotten to take account of inflation. [Interestingly, I read the other day that some economists predict that inflation will run wild, easily into double figures, in a few years as a result of the quantitative easing carried out by the Bank of England.]

So, quelle surprise, this 'good deal' that Mrs Greening and her predecessor, Philip Hammond, arranged for us, is in reality going to cost us an arm and a leg, as all parties who bid, not just for the West Coast Line, but for  many other lines in England, will have to be recompensed for their wasted time.  Costs per bid are said to be around £15 million (why?), so that's £60 million for the West Coast Line alone.

Staff at the DFT, they tell us, have been suspended (doubtless either very junior ones, or 'on full pay', or both).

In the meantime either Virgin will continue to run the line, or the DFT will have to take it on under the same organisation that runs the East Coast Line, which fell to the government after another fiasco involving National Express, which made an unrealistic bid, and the London government, which found that it had got its sums wrong. (Imagine not being able to make a go of the railway line between Edinburgh and London, with connections to Paris and Brussels! It beggars belief.)


No wonder Philip Hammond was sent to the War Office. They are notorious for wasting public money. He should fit in well.

The thing that worries me more than anything is that the Transport Select Committee invited the new Transport Secretary, Paddy McLoughlin, to give evidence only two or three weeks ago, and he assured them that the bidding process was "robust". It seems that this committee had no other option than to take him at his word: a word which seems not to have been worth the oxygen used to produce it.

I wonder how robust the process will be that discovers what went wrong, and how so many people from the management that devised the bidding process to the cabinet minister who signed it off could have been quite so stupid.