Virgin Group boss Branson hits back at critics of his East Coast rail franchise government bail out
Sir Richard Branson has hit back at critics who say the government has bailed out Virgin Group and its partner in the East Coast rail franchise.
In November, the government allowed Virgin and Stagecoach to withdraw from running the service three years early.
Lord Adonis, former chair of the National Infrastructure Commission, said the move could eventually cost the taxpayer billions of pounds. Sir Richard said the deal had cost Virgin and Stagecoach £100m.
In 2014, Virgin and Stagecoach signed a deal to run the East Coast line until 2023, promising the government £3.3bn in premiums.
In a blog published on Friday, Sir Richard said the two companies had been promised a huge upgrade of the tracks by Network Rail, which would have improved reliability and allowed more passengers to be carried.
“Considerable delays” to the upgrade and poor track reliability “torpedoed” the assumptions of the original bid, the blog said.
Sir Richard said he and his partners had not benefitted from the government’s move, but had lost “well over £100m in total” without receiving a penny in dividends.