Liverpool
Life
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DISGRACE 26th - February - 2013
The shocking cost of rail fiasco
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In the news this week...
By Hayley Minn
Liverpool MP Maria Eagle has demanded politicians stop dodging the blame after a report stated taxpayers have lost at least £50m as a result of the collapse of the West Coast Main Line running between Liverpool and London. Garston and Halewood MP Maria Eagle, the shadow transport secretary, said the Prime Minister must take responsibility for this fiasco. She said: “The Government must accept it was the short-sighted decision by ministers to axe external audits of multi-billion pound contracts which ended up with at least £50m of taxpayers’ money going down the drain. “It is a disgrace that every politician responsible for the bungled franchise deal has either remained in the cabinet or been promoted to it.” Last October, transport secretary Patrick McLoughlin scrapped the bidding process, in which Sir Richard Branson’s Virgin Trains lost out to FirstGroup in the battle for the 13-year West Coast contract, and the report, published by the Public Accounts Committee, examined the cancellation of this InterCity West Coast franchise competition. The Department originally spent £1.9 million on staff costs and external advisers to run the franchise competition, while each bidder spent around £10 million each. The Rt Hon Margaret Hodge MP, Chair of the Committee of Public Accounts blamed the Department of Transport’s lack of common sense in the way it ran the West Coast franchise competition for so much money being lost. She said: “The Department made fundamental errors in calculating the level of risk capital it would require bidders to put on the table and it did not demand
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appropriate levels of capital from both bidders. The franchising process was littered with basic errors. The department yet again failed to learn from previous disasters like the Metronet contract. “It failed to heed advice from its lawyers. It failed to respond to early warning signs that things were going wrong. The project suffered from a lack of leadership. There was no single person responsible from beginning to end, and, therefore, no one had to live with the consequences of bad policy decisions.” A spokesperson from the Government argued that the independent Laidlaw inquiry, published in November, identified the circumstances which led to the failures in the West Coast franchising programme and what steps the department should take to prevent this from happening again. They said: “The department accepted all the recommendations and has taken immediate steps by bringing together all rail activity under a single director general and recruiting a senior director to lead the franchising programme. Liverpool Life went out on to the streets of Liverpool to find out what the public thought of this loss of money. Jonathan Miles, 43, Wirral, said: “I’m not happy about it, I have to say. That’s a lot of money and it should have come from somewhere other than the taxpayer.” Atlanta Grieger, 31, Toxteth, said: “I don’t think it’s right considering the state we’re in now, in terms of economics. The government should take hold of their infrastructure, and I think the taxpayer should be left out of it.” Luke Bellis, 26, Ireland, said: “It’s a lot of money. I reckon they could have done something better with that money.” Virgin Trains will continue to run the service until November 2014, when new bidding starts.