Franchise bids and renewals become statement of intent from FirstGroup

FirstGroup's Tim O'Toole described Virgin's statement as 'histrionics'
FirstGroup's Tim O'Toole described Virgin's statement as 'histrionics'
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FIRSTGROUP is pursuing bids for three more UK rail franchises this year after scooping the West Coast service from Virgin.

The Aberdeen-based transport giant is bidding again for the Great Western and Thameslink contracts it currently runs, and for the Essex Thameside which is being operated by National Express.

All three franchisees are expected to be awarded in January.

Chief executive Tim O’Toole said the firm had “pre-qualified” for the bids and would continue to pursue the process.

He also hit back at criticism from Sir Richard Branson, who branded the UK government’s decision to award the West Coast franchise to FirstGroup as “insanity” and suggested the group had bid more than it could realistically afford.

O’Toole said the Virgin chief’s comments lacked consistency and amounted to “histrionics”.

Shares in FirstGroup went into reverse on Thursday as analysts were split over the benefits of it snatching the West Coast mainline route from a joint venture involving listed rival Stagecoach.

FirstGroup won the 13-year franchise with a bid of £5.5 billion, well above the £4.8bn offered by current operator Virgin Rail, in which Perth-based Stagecoach has a 49 per cent stake.

Some analysts questioned the rate of revenue growth FirstGroup was relying upon in order to meet its promises while remaining in profit. However, others were supportive and said the win was good news for the Scottish firm.

The company will introduce 11 more electric trains to increase capacity north of Birmingham as it seeks to grow the number of journeys taken on the lines, and has pledged to improve journey times between London and Glasgow.

The battle over the West Coast service was the first in a new round of franchise renewals taking place over the next two to three years.