By Nick Lester
RAIL services to and from Exeter have been thrown into limbo after ministers scrapped the delayed competition to run trains on the Great Western mainline.
It was one of three franchise contests ‘paused’ last year in the wake of the West Coast fiasco.
The current operator First Great Western has had its contract extended until October and negotiations will start on a new two-year contract with the company, while plans for the longer term will be set out in the spring.
At the same time, there will be preparations to take services into public hands in case agreement cannot be reached.
It will fuel fears that service improvements promised by the new 15-year Great Western franchise, such as tackling overcrowding and reliability, will not now be realised.
There are also concerns it will see the Government end up paying First Great Western to continue to run services, when the operator ended its contract three years early to avoid making an estimated £800 million in franchise fees.
Letting the contract was at an advanced stage, with bids due to be submitted last October, and a new operator announced this March.
But the contest was put on hold when the Government was forced to pull the plug on the controversial West Coast deal, after “significant technical flaws” were found in the way the franchise process had been conducted.
The Department for Transport has estimated that the collapse of this competition and subsequent inquiries cost the taxpayer around £48 million, as companies demanded compensation for the cost of submitting bids.
But the Transport Secretary Patrick McLoughlin has said he does not plan compensating bidders for the three suspended franchise competitions.
There were four companies shortlisted for the Great Western contract - FirstGroup; Arriva Trains; National Express; and Stagecoach.
A Stagecoach Group spokesman said: “We put a huge amount of effort into developing detailed plans to deliver the Government’s aspirations and improve train services for passengers. It is extremely disappointing that investment has been wasted through no fault of our own.”
The DfT has said the cost to the taxpayer of pausing and then ditching the Great Western contest is £1.5 million.
Announcing his decision, Mr McLoughlin said: “We have had to take some tough decisions regarding franchising, and while they may provide a challenge in the short term, I believe the lessons we have learnt will help deliver a more robust system in the future benefiting fare-payers and taxpayers alike.”
But Chris Irwin, chairman of TravelWatch SouthWest, said: “The risk of this situation is that far from the Government taking money from the operator in franchise payments we will end up paying the operator to do the job.
“That money has to come from somewhere. It will certainly mean further pressure on rail spending that could mean more overcrowding.”
Exeter MP Ben Bradshaw said: “We’re facing higher fares but further delays to the improvements promised and as taxpayers a massive bill because of this Government’s incompetence.”
FirstGroup chief executive Tim O’Toole said: “The extension of First Great Western…provides continuity and consistency for our passengers and enables us to continue to deliver considerable improvements to services.”