East Coast rail line shortlist revealed

East Coast train The East Coast franchise has been run by the government since 2009

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The government has published a shortlist of three bids to run the East Coast mainline as part of plans for the rail route's reprivatisation.

FirstGroup has been shortlisted, alongside a joint bid from Eurostar and French firm Keolis, and another from Virgin and Stagecoach.

The franchise, which covers the route between London and Edinburgh, has been publicly run since 2009.

It is due to return to private hands in early 2015.

Analysis

There's an irony in this list of bidders.

The government's moved the East Coast franchise to the front of the queue for privatisation because it wants the service out of public hands before the next election.

The unions are furious, claiming ministers are hell bent on off-loading the line despite the fact that it's made £640m for the government since 2009. That's more money in real terms than anyone else who's run the line.

But one of the bidders is Eurostar (with Keolis), and 40% of Eurostar is owned by a subsidiary of London & Continental Railways. And London & Continental Railways is owned by, erm, the government.

So if Eurostar and its partner win the bid, a bit of the franchise will still be, effectively, in public hands.

Now, the government has said it's selling off its bit of Eurostar, but that might not happen until 2020. Until then, they'd be a minority partner in the business.

"Giving passengers more will be at the heart of the new East Coast franchise," said rail minister Stephen Hammond.

"For our railways to continue to grow we need strong private sector partners who can invest and innovate in ways that deliver a world class service."

'Economic vandalism'

The government was forced to take control of the franchise after the previous operator, National Express, ran into financial difficulties.

The government says it always intended to return the route to the private sector, but transport unions have called for the franchise to remain in public ownership.

The TSSA rail union says the line has been a "success story" under public ownership.

"This is nothing short of economic vandalism by a chancellor who does not want voters to know the truth about the East Coast line - it is a public sector success story," said Manuel Cortes, the TSSA's general secretary.

"It has been the cheapest franchise to run for the past five years and it has produced the greatest return to taxpayers - over £600m."

Of the named bidders, First Group, Stagecoach and Virgin already operate UK rail routes directly.

Eurostar operates services through the channel tunnel and Keolis has a stake in Govia, which operates Southern and South Eastern.

The government says it will give the three groups a formal "invitation to tender" in February, after which they will be given at least three months to submit their bids.

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