British opposition, Branson urge delay over rail contract

Britain's opposition Labour party joined business magnate Richard Branson on Monday in urging government to delay the signing of a major railway contract until parliament returns next week.

Branson's Virgin Rail Group earlier this month lost a long-term deal with the British government to run the major West Coast Main Line railway from London to Glasgow as rival FirstGroup were awarded the 13-year franchise.

More than 100,000 people have signed an online petition calling for the decision to be reconsidered but the Department for Transport said it had "no reason" to delay the signing, which is due to take place Tuesday.

Labour lawmaker Maria Eagle, the shadow transport secretary, said there were concerns over how the new contract would affect fares and levels of service and called on the government to allow parliament time to consider the deal.

In a letter to Transport Secretary Justine Greening, Eagle said she had concerns over the history of "over-ambitious payment promises that proved impossible to realise" when it came to awarding rail franchises.

"The decision appears almost exclusively a 'bottom line' one, driven by a particularly high pledge of payments to Government," Eagle wrote.

Eagle's plea came after Louise Ellman, chairman of the House of Commons Transport Committee, also wrote to Greening asking her to hold off signing the final contract, saying that "important issues" had been raised.

Virgin Rail -- 51-percent owned by Virgin Group and 49-percent owned by transport firm Stagecoach -- has been running the route since 1997, during which time it introduced tilting high-speed Pendolino trains and more than doubled passenger numbers.

FirstGroup is set to begin services between England and Scotland from December but Branson on Sunday offered to run the line for free to allow the government time to review what he called an "outrageous" decision.

FirstGroup will have to pay back ?5.5 billion ($8.6 billion, 7.0 billion euros) to the government in premiums over the life of the franchise and Branson has claimed that their bid will lead to "almost certain bankruptcy".

The entrepreneur said Virgin Rail had offered to pay ?750 million less than this for the line.

Source: http://news.yahoo.com/british-opposition-branson-urge-delay-over-rail-contract-172928380.html

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