Virgin offers train upgrade deal

By Tom Symonds
Transport correspondent, BBC News

Richard Branson: 'We would be happy to invest some billions of pounds'

Sir Richard Branson has said his Virgin Group would invest at least £1bn in its train service if allowed to run its franchise for another 20 years or more.

He told the BBC London-to-Birmingham journeys could be cut to below an hour and London to Glasgow below four hours.

Virgin's current franchise deal with the government ends in 2012.

Sir Richard also set out a proposal for track improvements that would allow the current Pendolino trains to run at 145mph, rather than 125mph.

The southern end of the line could be connected to Heathrow Airport or the high-speed line to the Channel Tunnel, he said.

It would cost at least £1bn and Virgin would make the investment if it could rely on running the trains well into the 2030s, he added.

This would allow Virgin to benefit from increased passengers of 25% or 30%, raising up to £100m in extra ticket sales and other revenue.

"It's not a question of profiteering, " said the Virgin boss, speaking before a photo-shoot at London Euston station. "We could agree arrangements to share revenues with the government."

Bid battle

Faster and more frequent trains were critical, he said, for coping with the expected growth in passengers over the next decade - the period before any new high-speed line is built between London and Scotland.

Sir Richard also criticised the state of some of the stations on his line, including Crewe, Preston and Carlisle. "We've got 21st-Century trains running through 19th-Century stations," he said.

Virgin will have to bid against rival operators for the right to continue running the West Coast service. In 2007 it lost out in the race for the East Coast route, after being outbid by National Express, which is now suffering from having to pay hundreds of millions of pounds to the government.

Instead of favouring the highest bidders, Sir Richard said ministers should instead pick train operators based on the improvements they could deliver to journey times and frequency.

Virgin's blueprint could result in the company paying directly for track improvements, either through Network Rail or another private sector contractor. The approach has been pioneered on a smaller scale by the Chiltern Trains franchise between London and Birmingham.

Tony Collins, chief executive of Virgin Trains, said such a deal would need the government to contribute too - perhaps in recognition of the environmental benefits of better train services, as well as the support they would give to areas in need of economic redevelopment.

There are growing calls for train companies to be given more freedom to invest in services. The Conservatives have said they would offer operators longer franchises.

But the government has tightened its grip on private train operators, partly because of concerns that train companies that were allowed guaranteed incomes for decades could get complacent and allow services to suffer.