November 2022, Virtual
21 November 2022, Hilton London Metropole
Virgin Group owner Sir Richard Branson has hit back over criticism of the company’s running of the East Coast rail franchise.
The government is allowing Virgin Trains and joint venture partner Stagecoach to withdraw from running the franchise three years early in 2020.
This move has drawn criticism from former transport minister Lord Adonis who said the government’s decision could cost taxpayers “billions of pounds”.
But now Branson has hit back at critics in his online blog saying there has been “a lot of heat, but not much light” about the issue.
“The partnership of Stagecoach and Virgin did agree to pay £3.3 billion to the government over the eight-year franchise, which was originally due to run until 2023,” said Branson. “However that bid was based on a number of key assumptions and a promise of a huge upgrade of the infrastructure by Network Rail that would have improved the reliability of the track and allowed us to run more trains and carry many more passengers than we do today. “The considerable delays to this upgrade, to new trains, as well as poor track reliability will cost us significant lost revenue - amounting to hundreds of millions of pounds - and torpedoed the assumptions of our original bid.
“As the facts became clear about these issues - as well as a drop in Britain’s GDP growth - a discussion with government had to take place and a pragmatic solution was needed to keep delivering improvements and investment in the line.”