Handing back West Coast would “destroy” FirstGroup as a rail operator – O’Toole

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Handing back the keys to the West Coast would “destroy” FirstGroup’s ability to run a rail business in the country, said chief executive Tim O’Toole.

Addressing MPs yesterday, O’Toole said he saw no chance of FirstGroup pulling out of the franchise.

Earlier in the hearing Virgin founder Sir Richard Branson described FirstGroup’s bid as “bad for the country” and criticised the Department for Transport (DfT) for not properly assessing the risk involved.

Virgin said that calculations it has made suggested that the amount of financial security put forward by FirstGroup didn’t match the risk and that the forecast passenger growth, which FirstGroup believes will top 66 million people by the end of the term compared to Virgin’s 50 million, would not physically fit on the line.

Branson also suggested that FirstGroup’s bid was “back-ended” and created the risk that the operator could default before the end of the contract.

O’Toole said the claim was “flat-out wrong” and “just another bad guess” Virgin had made about First’s bid.

He added: “We’re long-time players in this business.

“We’ve been in the rail business a long time.

“I like to think we’re very good at it and it’s part of our business, and no business who cares about their reputation, where this is a core part of it, would so cynically manipulate the process such that they would throw away their prospects of continuing to be in the business longer term.

“This will require a lot of hard work, it’s the kind of hard work we’ve delivered in other places.

“There’s always risk involved with that. We just think we’re going to be able to handle that risk.”

O’Toole said FirstGroup won the franchise because it would offer more to the passengers and pay the Government more money. But Branson argued that the current franchise system was flawed, focusing solely on cost and not giving weight to “good ideas”.

When asked about what the “Doomsday scenario” would be, Branson said: “It is exactly what happened on the East Coast Mainline. It’s the awful disruption of them handing back the keys and all the investment that’s gone in the last 15 years into the West Coast Mainline goes to waste and the East Coast is the best example of that.”

Responding to suggestions that he was using his fame to try and get the Government to change its decision, Branson said: “I have created a number of different ventures with the principle aim of making a real difference to these sectors and creating something really special and the profit motive is not that important to me.

“I’m lucky, I can afford breakfast, lunch and dinner for the rest of my life.”

The hearing can be viewed online at www.parliament.uk

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