Rail Franchising: InterCity East Coast

Wednesday 10th December 2014 Written Statements

[The Secretary of State for Transport (Mr Patrick McLoughlin)]

On 27 November 2014 I announced my intention to award the InterCity East Coast rail franchise to Inter City Railways Ltd, a joint venture of Stagecoach Transport Holdings Ltd and Virgin Holdings Ltd, following the completion of a standstill period. I am happy to confirm to the House that the standstill period has now ended and that we completed the contract after the markets closed last night—9 December 2014. This means that Inter City Railways Ltd can now begin the mobilisation process that will mean the new franchise will start on 1 March 2015.

The new InterCity East Coast franchise will last for eight years and will deliver massive benefits for passengers, taxpayers and staff. Inter City Railways Ltd will oversee and facilitate the introduction of the new state of the art Intercity Express programme trains and will increase total capacity on the franchise by around 50%. They plan to deliver new services, including providing direct connections to London to five destinations that have not had services on the franchise before—Huddersfield, Sunderland, Middlesbrough, Dewsbury and Thornaby—and faster journey times to many destinations along the route. Passengers will benefit from an investment of £140 million in improving facilities at stations and on trains and the taxpayer will benefit from around £3.3 billion of premium to be paid to Government over the life of the contract.

Inter City Railways Ltd have great long-term plans for the Intercity East Coast and are the right company to take them forward with passengers at the heart of the franchise. I am delighted with this award and look forward to working in partnership with the new operator for the benefit of passengers, taxpayers and the industry.