The transport secretary has announced that Stagecoach/Virgin have won the new East Coast franchise following a "rigorous competition".
The announcement came after reports across the national press that Keolis/Eurostar would win, prompting fury from the Daily Mail and trades unions alike. Keolis is owned by the French state, and the U.K state-owned operator currently running the franchise could not bid.
The new franchise will run for eight years and Patrick McLoughlin said that the deal would lead to faster journey times, 50% more capacity, lower headline fares and the connection of five towns that were previously not connected to the franchise before - Sunderland, Middlesbrough, Thornaby, Huddersfield and Dewsbury. In total, the consortium, Inter City Railways, will invest £140m.
Furthermore, McLoughlin said, it would provide an improved premium of £3.3bn to the Government over the eight years. The appointment comes after Labour vowed to stop the letting of the contract, which they said was an example of "Tory dogma" given the public sector operator had brought in £1bn for the Treasury since 2009.
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