MINISTERS have been warned to learn from recent debacles to prevent further costly mistakes involving the East Coast rail franchise.

Unions reacted with dismay to news that the flagship route will return to private hands by 2015, pointing out that the last two private operators – National Express and GNER – had collapsed, forcing taxpayers to foot the bill.

FirstGroup and Richard Branson’s Virgin Trains are the leading contenders to take control of the line which links the North-East with London and Edinburgh. On a recent visit to the region Mr Branson confirmed: “We want to get our hands on the East Coast because I think we can transform it.”

The Department of Transport has operated the route since November 2009, after National Express walked away from its £1.4bn contract. Transport Secretary Patrick McLoughlin yesterday announced the start of a new bidding competition and also published a detailed timetable for all franchise arrangements over the next eight years, following a major review after the West Coast line bid process had to be abandoned last year.

The Northern Echo:

Rhian Kelly, CBI director of business environment, believed it was a final opportunity for the rail franchise system to rebuild credibility.

“It would be hard for franchising to survive another high-profile failure,”

she said. “The rail industry cannot afford further uncertainty which risks long-term damage to firms across the supply chain and cuts in rolling stock orders.

“Our eyes must remain on the long-term prize: attracting private investment and creating a much better service for passengers.”

Shadow transport secretary Maria Eagle was puzzled that the Government was determined to hand the route back to private operators. She said: “With the Government’s rail franchising programme in chaos, it is a bizarre and dogmatic decision to prioritise the privatisation of a service that is actually on track.

“Since running services on a notfor- private-profit basis, the East Coast operator has returned £640m to the taxpayer and invested more than £40m in improvements to the service, achieving some of the best results for passengers since records began. It’s clear that the Government has learnt nothing from the franchising fiasco that could eventually see more than £100m of taxpayers money go down the drain as a result of ministerial incompetence.”

Manuel Cortes, leader of the TSSA rail union, feared the move would be bad news for passengers. He said: “The Tories are just like the Bourbons when it comes to rail – they ignore all the lessons of history.

“The most expensive rail network in Europe is about to get even more expensive.”

Ross Smith, the North East Chamber of Trade’s director of policy, , said: “Our rail links to the capital and Scotland are vital and businesses will hope that lessons have been learnt from past mistakes on the East Coast Main Line and the debacle that was the bidding process for the West Coast Main Line last year.

“The Transport Secretary’s pledge to put the passenger at the forefront of the decision making is welcome and he must remember that business travellers form a critical part of the passenger mix. It would be a mistake to simply settle for the highest bidder, as has happened in the past.

“The current East Coast operation has done a very good job, given that it picked it up in difficult circumstances, but it is perhaps the right time to test the market and ensure we enjoy the best possible service.”

Richard Hebditch, campaigns director at the Campaign for Better Transport, called for a new approach which gave local people a bigger say in their railway.