Virgin boss Sir Richard Branson and Tim O’Toole, chief executive of Aberdeen bus and train giant FirstGroup, could lock horns again in a battle for the right to operate the east coast intercity rail services.
The Press and Journal revealed exclusively on Monday that FirstGroup would “definitely” be bidding to take over the franchise in a process due to start in February 2015.
Channel Tunnel train firm Eurostar and France’s Keolis had previously signalled their intention to bid jointly for the services.
Yesterday, Perth-based Stagecoach Group said it would “evaluate this opportunity” in conjunction with Virgin Group.
Stagecoach and Virgin are partners in Virgin Rail Group (VRG), the current operator of west coast intercity services between Scotland and London.
VRG found itself at the centre of a bitter row last year after it was told it had lost the franchise it had held since January 1997.
The Department for Transport (DfT) struck a deal with FirstGroup but Sir Richard launched a legal challenge, which led to flaws in the bidding process being uncovered and the DfT axeing its franchise award.
VRG was initially asked to continue operating the services until November next year but that agreement was later extended to April 2017.
Last December, a UK Government spending watchdog said taxpayers faced a significant bill over the botched franchise.
The DfT’s running of the bidding process lacked management oversight, leaving some staff confused by the system, the National Audit Office added.
A separate independent report, commissioned by the DfT and written by Centrica chief executive Sam Laidlaw, highlighted “serious problems” and “unacceptable flaws” in the bidding process. Mr Laidlaw found ministers were given inaccurate reports before they awarded the franchise to FirstGroup.
The DfT Westminster officially launched its search for a new operator for the east coast services, connecting Aberdeen and Inverness with London, last Friday.
Announcing its interest in a trading update yesterday, Stagecoach said: “We look forward to shortly receiving the pre-qualification material . . . and will evaluate this opportunity in conjunction with Virgin, our joint-venture partner on the current west coast franchise.”
The east coast intercity route had to be renationalised nearly four years ago after two consecutive private-sector operators bailed out.
Directly Operated Railways (DOR) took over the services on behalf of the UK Government in November 2009.
They were run previously by bus and train firm National Express (NatEx) under a franchise arrangement.
NatEx had struggled to make the network profitable, announcing in July 2009 it was no longer prepared to fund the operation.
GNER had previously given up the franchise, in 2007, after its parent – Bermuda-based Sea Containers – ran into financial difficulties.
Union bosses have fought to keep the route in public hands.