FirstGroup outbids Virgin for rail contract as Richard Branson calls decision "insane"

After Virgin Rail lost the West Coast main line rail franchise after 15 years to FirstGroup..

After Virgin Rail lost the West Coast main line rail franchise after 15 years to FirstGroup, mogul Sir Richard Branson branded the government's decision "insane". 

Wednesday morning saw the government confirm that the bidding war to take over a new 13-year, £5.5billion West Coast franchise had been won by transport company FirstGroup.

Virgin Rail, which is 49% owned by Stagecoach, have suggested that it is unlikely that they would bid again. 

Branson released a statement on his blog: "Based on the current flawed system, it is extremely unlikely that we would bid again for a franchise.

"Insanity is doing the same thing over and over again and expecting different results. When will the Department for Transport learn?"

In December, FirstGroup, which already has a number of rail franchises including Great Western and ScotRail, will start operating the London to Scotland West Coast line. 

FirstGroup's chief executive Tim O'Toole said: "We will be making significant improvements including reduced journey times and introducing new direct services."

Branson praised the work that his team had done during the last 15 year contract when they operated the West Coast which saw the company introduce high-speed Pendolino trains to the route and increased passenger levels from roughly 13million a year in 1997 to over double that 15 years on. The figure now stands at around 31million a year.

Rail minister Theresa Villiers remained neutral, stating that the new franchise would deliver "big improvements for passengers, with more seats and plans for more services".

She added to the press: "The West Coast is the first of the new longer franchises to be let by the coalition which has helped us secure real benefits for passengers by encouraging First West Coast Limited (as the company will be named) to invest in the future of the service."