The East Coast rail franchise, which runs through Newark and Grantham, will be scrapped next month, it has been announced.
A statement made by the Transport Secretary Chris Grayling on May 16 confirmed that the line will be terminated on June 24.
As previously reported, In February 2018, the transport secretary announced that the existing franchise, which is jointly owned by Stagecoach (90%) and Virgin Trains (10%), was ‘unsustainable’, with the firms losing nearly £200 million to meet contracted commitments.
Despite the financial problems, the transport secretary confirmed that the route ‘is not a failing railway’ and continues to generate ‘substantial returns for the government’.
The transport secretary previously stated he would either renationalise the London to Edinburgh line or negotiate a ‘not-for-profit’ arrangement with Stagecoach and Virgin Trains.
In a statement in the House of Commons on May 16, the transport secretary said: “In the past two months, my department has carried out a full analysis of these options, focusing on how each performs against the key principles I set out in February: protecting passenger interests; ensuring value for money for taxpayers; and supporting investment and improvement in the railway.
“I have decided to begin the transition process towards creating the new partnership now. This will be in the long-term interests of passengers – as every member of staff on the railway will be solely focused on delivering an excellent service for the future.
“I am therefore informing the House that I will terminate Virgin Trains East Coast’s contract on June 24, 2018.
“I plan to use a period of Operator of Last Resort control to shape the new partnership. So on that same day we will start with the launch of the new, long-term brand for the East Coast Mainline through the recreation of one of Britain’s iconic rail brands, the London North Eastern Railway – LNER.
“I am creating a new board with an independent chair to oversee the operation of the LNER route and work with my Department on building the new partnership. It will have representatives of both the train operating team and Network Rail, as well as independent members who will importantly ensure the interests of other operators on the route are taken into account. I will appoint an interim chair shortly, and then begin the recruitment process for a long term appointment.
“When it is fully formed the new LNER operation will be a partnership between the public and private sectors. In all circumstances ownership of the infrastructure will remain in the public sector, but the railway is at its strongest when it is a genuine partnership between public and private.”