Civil servant suspended in wake of West Coast rail fiasco to take legal action against DfT

• Three civil servants were suspended after the Government oulled the plug on the West Coast bidding process

• ‘Significant technical’ flaws in franchise process discovered whilst preparing a defence against court proceedings after Sir Richard Branson launched a legal challenge against the decision not to renew Virgin’s contract on the line

Kate Mingay, the department’s commercial and technical services director, was one of three DfT officials suspended after the Government pulled the plug on the West Coast bidding process earlier this autumn.

A spokesman for Mrs Mingay said today: “We can confirm that Mrs Mingay has issued proceedings against the DfT. We have nothing further to add at this stage.”

It is believed that a court hearing will take place on Thursday.

The news of the proceedings comes as the DfT prepares to receive an independent review report into West Coast.

Headed by senior business figure Sam Laidlaw, the review will make grim reading for the DfT.

Last summer the DfT decided to award a new 13-year West Coast franchise not to Sir Richard Branson’s rail company Virgin Trains but to rival company FirstGroup.

Sir Richard branded the bidding process “insane” and launched a legal challenge. It was in preparing a defence against the court proceedings that what Transport Secretary Patrick McLoughlin described as “significant technical flaws” in the franchise process were discovered.

Mr McLoughlin, who had not been in charge when the FirstGroup decision was made, called off the bidding process and announced Mr Laidlaw’s inquiry and a second, independent, inquiry into the whole franchise bidding system.

Mr Laidlaw has already published a damning initial-findings report, which said that “an accumulation of significant errors...resulted in a flawed process”.

This initial report said that the DfT decided to carry on with the bidding even though it was aware of a lack of transparency in the subordinated loan facility (SLF) process - the amount the successful bidder would have had to forfeit if unable to fulfil the contract.

Mr Laidlaw’s initial report said the DfT also went ahead accepting the risk of a legal challenge to the process.

The report said evidence strongly suggested that the DfT’s franchise process for West Coast “was developed late, in a hurry and without proper planning and preparation”.

The way the process had been conducted raised “potentially significant issues about the ability of the DfT effectively to conduct rail franchise competitions”, the report said.

Mr Laidlaw, who is a non-executive director of the DfT, is due to give evidence to the House of Commons Transport Committee next week.

Virgin has run the West Coast line since 1997, with FirstGroup having been due to take over on December 9 this year.

Following the scrapping of the bidding process, Mr McLoughlin announced that talks, which are still continuing, were under way for Virgin to remain as West Coast operator for between nine and 13 months while a competition was run for an interim franchise agreement.

Both Justine Greening, who had been Transport Secretary when the FirstGroup announcement had been made, and Mr McLoughlin had defended the bidding process when Sir Richard had challenged it.

Mr McLoughlin had also backed the department in the first of two recent appearances before the Commons Transport Committee.

In his second appearance before the MPs, Mr McLoughlin said mistakes were made that should not have been and they were “regrettable and very serious for the department”.

He added that taxpayers, who will have to fork out at least £40 million for the failed bidding process, had “a right to expect better”.

Following her suspension at the beginning of last month, Mrs Mingay issued a statement.

She said: “While it has been widely reported in the context of the award of the franchise for the West Coast Main Line that I have been suspended, my role has been inaccurately portrayed, mainly due to statements and other comment made by the DfT itself.

“I would like to make it clear that:

• I did not have lead responsibility for this project;

• Neither I nor any member of my team had any responsibility for the economic modelling for this project, or for any DfT project;

• Nor did I have any responsibility for the financial modelling in respect of this project;

• I have not been involved in briefing DfT ministers or other Government ministers in respect of this project.

“I will, of course, co-operate fully with all ongoing and future investigatory processes in relation to this matter, but wanted to correct the completely inaccurate portrayal of my role immediately.”