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Greening rail decision considered "unlawful"


Greening rail decision 'unlawful'

 0 0 434Thursday, 30 August 2012

Virgin Rail has accused Transport Secretary Justine Greening of acting "unlawfully", "irrationally" and against EU law by awarding the £13.3 billion contract for the West Coast main line to rivals FirstGroup.
The rail company launched a judicial review over the decision on Tuesday, which has delayed the signing of the new West Coast contract.

The Daily Telegraph said that Virgin Rail was focusing on three key alleged failings by Ms Greening in its legal challenge.

The company, of which 51% is owned by Sir Richard Branson and 49% by Stagecoach, claims she "breached her obligations of equal treatment, transparency and her duties to act consistently and rationally".

It contends Ms Greening should have ordered FirstGroup to make a guarantee of more than three times the £190 million "shareholder loan" it is actually providing against the risk that it fails to honour the contract.

The claim, brought by Virgin Rail's lawyer Herbert Smith, also accuses Ms Greening of straying from the "criteria set out in the invitation to tender" document.

A Department for Transport spokesman said: "We will fight these claims robustly and show clearly that these allegations by Virgin and their business partners Stagecoach are ill-founded and misconceived. We expect to sign the contract soon.

"We will not comment at this time on specific allegations made in the court pleadings but will respond in detail shortly. We are confident that our process is robust and that the decision reached was absolutely the right one for taxpayers and passengers."

FirstGroup told the Telegraph it had "every confidence in the DfT's process which is rigorous, detailed and fair".

The profitability of the West Coast mainline since Virgin Rail took over its operation 15 years ago might go some way to explaining Sir Richard's desire to fight the Government's decision on awarding the contract to FirstGroup. The company has earned 6.6% average annual operating margins during that period, one of the highest of the 19 rail franchises, the Financial Times reported.


Read more: http://www.belfasttelegraph.co.uk/news/local-national/uk/greening-rail-decision-unlawful-16204187.html#ixzz259mmEzzG

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