TRANSPORT Minister Chris Grayling said he is “not a specialist in rail matters” as he gave evidence to MPs yesterday.
Grayling was grilled about problems on the tracks as he gave evidence to the Transport Committee on the Edinburgh-London Intercity East Coast franchise, which is back in public hands after Virgin Trains East Coast crashed out of the route.
The operator is majority owned by Scottish coach powerhouse Stagecoach and was not able to deliver the passenger or revenue growth it promised.
When asked whether the firm should have been able to renegotiate the agreement, Grayling said: “I don’t think we can possibly be seen to bail out a company that has made an ambitious bid. My job is to protect the interest of the taxpayer, not Stagecoach’s shareholders.”
He went on: “Stagecoach overbid and paid the price for doing so.”
The eight-year contract had carried a promised premium of more than £3 billion and Stagecoach chief executive Martin Griffiths has said the failure to deliver put a £200 million dent in company, costing it the equivalent of one fifth of its current market capitalisation.
Grayling said warnings had come early in the contract, but there was no way to bring it to a halt until the franchisee “reached the point of default”.
Meanwhile, committee chair Lilian Greenwood pressed Grayling for answers about weeks of delays on services in the north and south of England following May timetable changes. Grayling said: “It would have been irresponsible, in my
view, for a Secretary of State who
is not a specialist in rail matters
to intervene and say this must
not go ahead.”
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