Branson's plan to restart Virgin Trains 'could eat up millions in government funds'

Sir Richard Branson leans out of the driver's compartment of the Virgin Pendolino in Liverpool, 2012. Photo: Photo Ellis/AFP via Getty Images

Offer Sir Richard Branson's relaunch of Virgin Trains could cost taxpayers millions of pounds, the company's former chairman has said.

Richard Bowker, who led Virgin Rail for about two years after his appointment in 1999, warned that a relaunch could do more than just public funds, but also increase congestion on Britain's busiest rail route. 

So far, Virgin's plans to run trains from London to Birmingham, Manchester, Liverpool and Glasgow have been well received, given the woeful history of delays and cancellations on Avanti Rail, which Sir Richard's new service will compete with.

However, Mr Bowker dampened the enthusiasm by explaining how Virgin's bid to provide an «open access» rail service would take away money meant for the government. 

This is because the Treasury will not receive revenue from Virgin for the open access routes, unlike other rail operators who have fee-based management contracts and must pass on all revenue to the government.

Mr Bowker warned: «There is a hidden cost to the taxpayer of open access services that could run into millions of pounds.»

The majority of Virgin's revenue will inevitably come from business taken over from Avanti, he said. 

However, these revenues will remain with Virgin and will not go to the state treasury. 

Virgin provides 15 daily return flights between London and Liverpool, almost matching the 18 offered by Avanti. 

There will also be eight to Birmingham and four to Glasgow, representing one-fifth of the Avanti schedule, and seven to Manchester, or 15% of the Avanti total.

By stealing. With Avanti's sales potentially reaching hundreds of millions of pounds, the incumbent may well have to cut services or increase tariffs to fill the gap. 

Virgin operated trains on the West Coast Main Line for more than two decades before losing that right five years ago. 

That same year, the Ministry of Transport handed over the line to Avanti, a consortium of FirstGroup and Trenitalia from Italy.

Avanti has since been dogged by crises, including a scandal over drivers working overtime. this crippled operations. 

It remains the best-performing train company in the UK, with more than 15% of services canceled or delayed by 15 minutes or more, according to research published in April.

Mr Bowker said: “Everyone wants to believe that Virgin is going to come to the rescue. They use the rules as they stand and are very entrepreneurial. But I'm afraid the consequences will be much more complex than people think.»

Virgin's sprawling schedule would also be difficult to fit within the UK's existing rail infrastructure, Mr Bowker added. < /p>

Virgin said it had cut travel times and tripled during the period it operated the West Coast Main Line and that its return to the route would provide «much-needed choice, competition and exceptional customer service».

A Virgin Group spokesman added: “As an open access operator, Virgin will not receive any government or taxpayer funding to provide the service and we will assume all financial risks associated with operating these routes. This is in contrast to current franchise operators, who are paid by the government to provide their services.”