£100m compensation for Virgin trains
Hundreds of millions of pounds of taxpayers' money is to be used to support Sir Richard Branson's rail company following Railtrack's failure to upgrade the West Coast line.
Delays in completing the £7 billion work have meant Sir Richard has been unable to run his high-speed tilting trains.
Today it was announced that Virgin would receive around £100 million compensation for the delays.
The money will come from public funds because Railtrack plc is currently in administration.
It was also announced today that because of the effect of the upgrade delays, the Strategic Rail Authority (SRA) would be supporting the running of Virgin's West Coast and Cross Country franchises.
Transport giant Stagecoach, which has a 49% stake in Virgin Rail Group, said the SRA would be providing funds of between £230 million and £465 million in addition to the compensation figure which Stagecoach put at £91 million. The deal angered both MPs and passenger groups.
Louise Ellman, Labour MP for Liverpool Riverside, said: "This confirms how Railtrack has failed in its duties and it is an utter disgrace that public money on this scale, indeed on any scale, should have to be found to fund this failure.
"I now call on the new Network Rail (the body taking over from Railtrack) immediately to review its maintenance arrangement in terms on efficiency and safety and to give a commitment, and honour it, to modernise the West Coast main line so that the regions like the North West, which Railtrack has failed, do not fall further behind in economic prosperity."
Anthony Smith, national director of the Rail Passengers Council, said today: "Passengers must be wondering when they are going to be see some compensation."
He went on: "After years of paying high prices and suffering poor service on West Coast services, passengers were hoping that the promised investment they were helping to pay for would come about.
"Now it appears that there is going to be less investment and, to add insult to injury, fares may be going up as well."
