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Chase Bank Limits Cash Withdrawals, Bans International... Before you read this report, remember to sign up to for 100% free stock alerts Chase Bank has moved to limit cash withdrawals while banning business customers from sending...

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Richemont chairman Johann Rupert to take 'grey gap... Billionaire 62-year-old to take 12 months off from Cartier and Montblanc luxury goods groupRichemont's chairman and founder Johann Rupert is to take a year off from September, leaving management of the...

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Wintry weather expected to cause further disruptions in UK

Category : Business

Snowfall and freezing temperatures forecast this week, making further transport delays and cancellations likely

Snow is expected to blanket the UK for the next week, with freezing temperatures causing hazardous conditions and further delays and cancellations after three days of transport disruption.

Heathrow, one of the world’s busiest airports, said it would cancel about 130 flights on Monday after cancelling twice that number on Sunday.

After a £36m investment in cold weather equipment since 2010, when snow almost shut it down just before Christmas, Heathrow said it was coping with the wintry conditions. The reduction in capacity on Sunday was mainly owing to low visibility rather than snow on the runways, it said.

Passengers complained of long delays waiting on board aircraft for planes to be deiced. Airlines, which are responsible for deicing, said they were doing all they could to get planes off the ground.

British Airways said it had called up more than 100 volunteer personnel to help with deicing, which was taking more than 30 minutes per plane because of the freezing conditions and persistent snowfall.

Heathrow said it would normally have aircraft arriving or departing every 45 seconds. But low visibility meant that “at the moment that spacing is doubled and that’s why we are running at a reduced capacity,” a spokeswoman said.

On Sunday the airport said its snow-clearing operations were running according to plan. A spokeswoman said it was “a myth” that other airports had not experienced disruption because of the snow, pointing to problems at Munich, Geneva and Frankfurt, as well as 40% of flights being cancelled out of Paris.

The airport said that because it operates at almost capacity, there was “simply

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Rail passengers warned of further fare rises as £37.5bn upgrade unveiled

Category : Business

Network Rail’s plan for extra 170,000 commuter seats by end of decade based on annual fare rises staying 1% above inflation

Rail passengers have been warned they face at least six more years of above-inflation fare rises – potentially adding more than £1,000 to the cost of some annual season tickets by 2019.

Outlining a £37.5bn upgrade plan for 2014-19, Network Rail said it would provide an extra 170,000 commuter seats at peak times by the end of the decade, but assumed annual fare rises would stay at 1% above the retail prices index (RPI) measure of inflation throughout the period.

It comes days after rail fares for season ticket holders rose by an average of 4.2%, and ticket prices by 3.9% overall, and prompted warnings that passengers had already suffered enough pain from 10 years of inflation-busting rises.

The TSSA rail union said: “[Passengers] should not now be expected to face another six years of even higher fares … they have been persecuted enough already.”

Rail customer watchdog Passenger Focus said: “Frankly, passengers have had enough. We feel the rail industry is about to hit its moment of truth.”

If annual season tickets continue to rise by 4.2% a year (based on July RPI plus 1%) over the next six years, this would push up the typical cost from £2,191 to £2,804. However, there are big differences between routes: an annual ticket from Canterbury, Kent, to London, which now costs £4,812, would jump to £6,159 by 2019, based on that formula.

The Network Rail plan envisages 225 million more passengers a year and 355,000 more trains by 2019. It aims to provide 20% more seats on trains into central London during the morning rush hour and 32% more into large cities in England and Wales.

Projects include electrification schemes, including the Great Western and Midland main lines, station improvements at Birmingham New Street and Reading in Berkshire, and reopening 31 miles of railway lines in Scotland closed under the Beeching cuts 50 years ago. However, the package must be approved by the Office of Rail Regulation to take effect.

Network Rail’s group strategy director, Paul Plummer, said it was assuming annual fare rises would stay at RPI plus 1%. He added that altering the annual fare formula was a matter for ministers and that if a government wanted to make changes it would need to increase the annual public subsidy to the railways. The plan predicts a cut in the subsidy to £2.6bn-£2.9bn by 2019, down from £4.5bn in 2009.

Network Rail’s chief executive, Sir David Higgins, said the industry had entered an “era of trade-offs”, adding: “Increasingly, we have to balance the need to build more infrastructure, run trains on time and cut costs. In many areas, choices will need to be made.”

Anthony Smith, chief executive of Passenger Focus, said: “Passengers have already suffered 10 years of above-inflation increases.” Any “normal” industry could have delivered lower prices on the back of the big increase in demand seen in the rail industry in recent years, he said, but the opposite had happened.

“There needs to be greater efficiencies of scale and a better use of new technology. If there was more standardisation across the industry, this would help,” Smith added.

“Currently, the train companies all run different types of trains which adds unnecessary costs. Only when these changes happen will we have a more efficient industry which, in turn, will mean the fare increases that have hit passengers so hard in recent years can start to level off.”

Campaigners have claimed that rail fares for season ticket holders have risen by as much as 50% in the past decade, making travelling to work by train an extravagance that people struggle to afford.

The government had intended to allow train companies to raise the average price of regulated fares, which include season tickets, by RPI plus 3% this and next January.

In October ministers announced it would instead be limited to RPI plus 1%, a 4.2% rise. However, Labour said the government had undermined its pledge by reinstating flexibility, allowing firms to raise non-regulated fares.

West coast mainline investigation searches for Richard Branson emails

Category : Business

‘Anyone but Virgin founder’ comments sought by inquiry as ministers admit total cost of of fiasco will exceed £40m

The inquiry into the west coast mainline franchise competition has demanded a trawl of Department for Transport emails to search for rumoured “anyone but Branson” comments after finding that bidding companies were treated differently.

The DfT’s permanent secretary, Philip Rutnam, told MPs that although he had no evidence of such emails, both the inquiry, led by Sam Laidlaw, and the civil service’s own internal staff investigation would be checking the correspondence.

Virgin has long suspected that antipathy towards it played a part in the award of the lucrative London-Manchester-Glasgow train service to FirstGroup before the franchise competition was aborted.

Rutnam said he knew of no bias or impropriety, and he – not ministers – had taken the “precautionary” decision to suspend three civil servants.

Questioned by the Commons transport select committee as to why ministers had defended the process as “robust” despite apparent early warnings that it was awry, Rutnam said that while he “would expect that” problems would be relayed to ministers, he could not say if they had been alerted in this case.

Rutnam said that even he himself, as the senior civil servant in the department, was debarred from the decision-making process under confidentiality rules. But he believed that the mistakes now highlighted had been “textbook errors”, and added: “I thought, where is the quality assurance process?” He also questioned whether the rules on anonymity were helpful in the procurement process.

Facing MPs alongside Rutnam at the select committee, the transport secretary, Patrick McLoughlin, admitted that “things went very badly wrong” and that the total cost of the debacle would rise far beyond the £40m already earmarked to compensate bidders.

He said the extra costs would include reimbursing FirstGroup and also Directly Operated Railways for preparatory work done before the decision was made to allow Virgin to continue running the line when its contract expires in December. He did not rule out legal action from FirstGroup, whose shares dropped 20% when the award was overturned.

Despite the shock to his company, FirstGroup’s boss, Tim O’Toole, made a robust defence of rail franchising and the privatised system. Speaking at the Guardian’s annual George Bradshaw address, O’Toole said the rail industry had to “confidently defend the current business model even in the wake of the current fiasco”.

He said: “The rail franchising system has produced spectacular growth and the structure going forward must do the same.”

He warned that the call for shorter franchises – reiterated this week by Labour’s Alistair Darling – was a “kneejerk reaction” and said it should be “tempered by the effort to preserve the advantages of longer franchises”.

The interim report released this week by Laidlaw, Centrica’s chief executive, found that the overstretched department breached its own guidelines and continued to run the franchise competition even after it became aware of problems that made a legal challenge likely. His final report is due by the end of November.

Virgin is negotiating terms of its contract extension for the next 14 months while a two-year franchise is awarded. The government plans to run a long-term competition in that time.

West coast rail fiasco: transport secretary faces grilling from MPs

Category : Business

Patrick McLoughlin may be quizzed over own role in failure of rail franchise that has cost taxpayers £40m in compensation

The transport secretary, Patrick McLoughlin, will be grilled by MPs this week about the west coast rail franchise, armed with a report into the fiasco from Centrica boss Sam Laidlaw.

Laidlaw, a non-executive director at the Department for Transport (DfT), has submitted an interim study of the failed process to McLoughlin, who has already suspended three DfT officials after discovering “significant flaws” in the decision to award the deal to FirstGroup ahead of incumbent Virgin Rail.

Following the discovery of errors in how the bids were evaluated, McLoughlin tore up the contract and retained Virgin as the operator of the London-Glasgow route on a short-term basis.

McLoughlin will appear at the House of Commons transport committee on Wednesday to face questions over the process, which has cost taxpayers at least £40m in compensation to the four shortlisted bidders for the contract.

Early indications are that the model used to forecast economic growth and revenue was producing incorrect figures – a mistake not picked up by a department that had lost large numbers of key staff. Laidlaw’s investigation was assisted by a team of external accountants.

But McLoughlin himself may face questions about his own actions during the crisis he inherited after the cabinet reshuffle in September, including why he assured the transport select committee last month he had full confidence that Virgin’s legal challenge to the decision to award the contract to FirstGroup would fail.

The previous transport secretary, Justine Greening, had already demanded a full investigation of the process once officials in her department had admitted to errors that could affect the outcome.

McLoughlin may also have to defend his actions in announcing the suspension of three civil servants at the same time as cancelling the franchise competition at the beginning of this month. Amid accusations that officials were being made scapegoats, one of the three, Kate Mingay, put out a statement through lawyers insisting her role and responsibilities had been inaccurately portrayed by DfT briefings.

A DfT spokesman said: “We expect the initial findings of Sam Laidlaw’s inquiry to be published before the end of the month.”

McLoughlin also faces questions over another controversial DfT procurement as the committee seeks assurances that the failure of the west coast contract will not delay closure of the £1.4bn Thameslink contract any further.

Thameslink is taking longer to sign off than expected and is not expected to be finalised until the new year, which has prompted calls from unions and MPs for the process to be started again or for the contract to be handed to the Bombardier factory in Derby. Siemens, the German industrial group, was selected ahead of Bombardier last year as preferred bidder for the contract.

Steve Scrimshaw, head of Siemens’s UK train division, confirmed the contract would not be signed in the autumn as hoped. He said: “We are disappointed that it has taken longer than we anticipated. But we still remain confident that we will get there.” He added: “Depending on progress over the next month or so, we hope to achieve commercial close by Christmas with financial closure in the new year. The negotiations are ongoing”.

Until the DfT was forced to scrap the award of the west coast contract to FirstGroup, the deal to build 1,200 Thameslink carriages had been the department’s biggest procurement headache, after Siemens was selected ahead of Britain’s last remaining train factory as preferred bidder. Bombardier has since cut at least 1,000 jobs at Derby and made clear that the hopes of the remaining 1,600 workers are pinned on a £1bn contract for trains on Crossrail in London. Siemens and Bombardier are two of the four shortlisted bidders for Crossrail, who must submit their offers by Monday’s deadline.

One industry source expressed concern that the Crossrail process, due to close in 2014, could be delayed because the DfT, banks and one of the shortlisted bidders are still trying to wade through the Thameslink arrangement.

In a letter to McLoughlin this month, the transport committee chair, Louise Ellman said she would also like to know if the west coast cancellation would cause problems for signing off the Thameslink deal. She asked the minister: “What are the reasons for the delay in completing the Thamelink rolling stock procurement and when do you expect this to be concluded?”

Trouble on the line: what caused the train franchise fiasco?

Category : Business

Andrew Martin grew up in a railway world. His father worked at ‘head office’; they holidayed with the British Rail Touring Club. So what does he make of the franchise fiasco?

At the time of writing, the number of civil servants suspended over the awarding of the West Coast mainline rail franchise to First Group is three. They had misapplied the awarding criteria, and their suspension seems unfair on the face of it, like being expelled from school for failing a maths test. One newspaper damned the incompetence of the civil

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West coast mainline fiasco may claim further victims

Category : Business

Civil servants at transport department braced for more suspensions amid warnings over true cost of reversal

Civil servants at the crisis-ridden Department for Transport (DfT) are bracing themselves for further suspensions as the investigation into the west coast mainline franchising fiasco unfolds, amid fresh warnings that the true cost of the reversal could make the £40m compensation bill so far look like “small change”.

Questions were raised about the independence of the review, with fears that officials could be made scapegoats for mistakes that saw Virgin Trains block the award of Britain’s most lucrative franchise to rival FirstGroup and leave rail policy in tatters. The UK’s largest civil service union said blaming Whitehall staff for the debacle was deplorable.

Sam Laidlaw, the Centrica chief executive who sits on the DfT board, has been asked by the transport secretary, Patrick McLoughlin, to conduct an “urgent independent examination” of what went wrong in the franchising process.

Shadow transport secretary, Maria Eagle, said: “It is scandalous that this review of what is a huge failure of the government should be conducted by a senior figure in the department. We need a truly independent inquiry led by a figure unconnected to the DfT examining the role of officials from top to bottom – and including ministers. There must be no scapegoating.”

A former senior figure in the department said Laidlaw was “absolutely inappropriate”. He added: “Having an internal inquiry doesn’t strike me as very independent. If you really wanted to get to the bottom of this, you’d have it done externally.”

The Public and Commercial Services union, which represents one of the three suspended employees, said it would ensure that the DfT inquiry held ministers to account. “We will be ensuring the inquiries fully examine all the issues, including ministerial involvement and oversight of the bidding process,” said Mark Serwotka, the PCS general secretary.

The most senior of the suspended civil servants has been identified as a former Goldman Sachs executive director, Kate Mingay, the corporate finance director at the DfT.

Investigations are likely to focus on a breakdown in procedure in the parallel conversations the DfT held with Virgin and FirstGroup towards the end of the bidding process. The rival train operators were led to interpret information differently about how risk would be assessed and calculated, modifying the sums both felt able to bid.

Virgin was aghast that FirstGroup had only put up a £190m bond against defaulting on larger premiums, but FirstGroup was confident Virgin was wrong to claim the figure should have been far larger. However, the problems have been traced back to the original invitations to tender that were templates for the whole current franchising process.

The former cabinet secretary Lord O’Donnell said government departments were suffering from “skills shortages”, particularly in procurement and civil servants should be paid more to stem the Whitehall talent drain. According to estimates by the FDA union, one in four senior civil servants have left the DfT since 2010.

Rail insiders warned that the ultimate economic cost of the west coast reversal would far exceed the reimbursing of bidding companies because the compensation bill could reach £90m and the refranchising of Britain’s railways could be delayed by a year. A senior industry source said: “The hit on the supply chain will be huge. The £40m is small change in terms of the overall impact.”

FirstGroup had promised to order new trains immediately and similar investment would be expected from new winners of most franchises.

According to industry estimates, bidders for the three franchise contests that were put on hold by McLoughlin – Thameslink, Essex Thameside and Great Western – will have incurred total costs of about £50m and could seek to claw back that amount. The loss to taxpayers rises by a further £75m with the loss of franchise payments for the first years of delayed franchises.

The secretary of state and top officials consulted lawyers on Thursday over the immediate future of the line. One possible option being explored is that Virgin will continue to run the operation while technically under contract to Directly Operated Railways, the DfT’s state arm, to minimise the risk of legal challenge from rival bidders.

Rail franchises: a signal failure | Editorial

Category : Business

The Department for Transport has had seven secretaries of state in six years: too many ministers and not enough management

The Department for Transport has had seven secretaries of state in six years: too many ministers and not enough management. Less than 24 hours after Ed Miliband’s litany of government failures and embarrassments in Manchester, the department produced another of its heroic fiascos. But blaming the eleventh-hour decision to abandon the west coast mainline franchise-letting operation because of mistakes in the process by three officials is to miss the point. The system itself is not fit for purpose. Less than a month after David Cameron shuffled all three Tory transport ministers into new jobs (promoting Theresa Villiers, who had been in charge of the franchise process to the cabinet), the process of awarding the most lucrative of the rail franchises has been frozen. So have all other imminent refranchising negotiations. The cost to the taxpayer will be at least the £40m promised in compensation to the bidders. Even less clear is the impact on future inward investment in infrastructure, of which the coalition has such high hopes.

The west coast franchise was the first to be awarded under the coalition’s new design of a longer franchise with more risk to the operator and more cash for the Treasury. The key judgment officials had to make was on the sustainability of the offer, the balance between risk and revenue. When the franchise was awarded to FirstGroup, industry critics tended to dismiss cries of foul from the existing franchisee, Virgin Trains, since Richard Branson advisers had reportedly, in an unguarded moment, described it as a licence to print money. But the claim that First’s revenue projections were based on a “preposterous” increase in journeys was more sympathetically heard. They were not due to happen for 10 years, and there were allegations that the company would game the system – an accusation it has faced in connection with its Great Western contract. Meanwhile, the franchise for another of the strategic rail routes, the east coast mainline, has been handed back twice by operators whose bids were unsustainable and is now being run (to the taxpayers’ advantage) by the government through Directly Operated Railways (DOR), an arms’ length body.

Patrick McLoughlin, the new transport secretary, insists that the problem has been mechanical rather than systemic. He promises passengers will not suffer while the franchise process is frozen, pending the outcome of the two inquiries he has instigated. He does not sound like a politician preparing wholesale reform. Nor, more worryingly, does Labour. There’s support at the top for the idea of the gradual return to a form of public ownership – not a return to British Rail, more a development of DOR or the non-dividend Network Rail. But this is an argument that needs to be made, and the time to start is now.

West Coast rail contract halted in shock move

Category : Business

Transport secretary announces competition has been cancelled following discovery of flaws in franchise process

The future running of one of Britain’s most prestigious and lucrative rail services, the West Coast main line, was thrown wide open after the transport secretary, Patrick McLoughlin, announced that the competition had been cancelled following the discovery of significant technical flaws in the franchise process.

The news could potentially put other franchises due to be settled in the next two years on hold and will raise questions over the whole system, with unions and Labour considering calling for renationalisation.

The shock move means that the Department for Transport will no longer be awarding a franchise contract when Virgin’s current one expires on 9 December, and will not contest the judicial review that Sir Richard Branson’s firm sought in the high court.

In a climbdown that appears to vindicate Virgin’s angry reaction to losing the franchise on 15 August, the DfT has indicated key staff will be suspended, apparently for incorrectly calculating the risk involved in the winning bid.

A spokesman for FirstGroup, which had been awarded the franchise, said: “We are extremely disappointed to learn this news and await the outcome of the DfT’s inquiries. The DfT have made it clear to us that we are in no way at fault, having followed the due process correctly. We submitted a strong bid, in good faith and in strict accordance with the DfT’s terms.

“Our bid would have delivered a better deal for West Coast passengers, the taxpayer and an appropriate return for shareholders.”

The DfT said it had uncovered serious flaws in the procurement process. FirstGroup’s winning bid, with payments heavily loaded towards the back end of the 13-year franchise, offered premiums far in excess of the bond it was offering as security. Virgin had described the winning bid as a recipe for bankruptcy.

An investigation will be conducted by the department, which is likely to speed ahead with plans to pass the running of the West Coast line into the hands of state-owned company Directly Operated Railways to ensure that train services continue uninterrupted.

McLoughlin said passengers would continue to be served by the same trains and frontline staff. The transport secretary has ordered two independent reviews to be undertaken urgently: the first into what went wrong with the West Coast competition and the lessons to be learned, the second into the wider DfT rail franchise programme.

McLoughlin has asked officials to examine the options for the operation of the service after 9 December taking into account procurement and competition law. Meanwhile he has frozen all other outstanding franchise competitions – Great Western, Essex Thameside and Thameslink – pending the independent reviews, which the Dft hopes will ensure future competitions are robust.

McLoughlin said: “I have had to cancel the competition for the running of the West Coast franchise because of deeply regrettable and completely unacceptable mistakes made by my department in the way it managed the process.

“A detailed examination by my officials into what happened has revealed these flaws and means it is no longer possible to award a new franchise on the basis of the competition that was held.

“I have ordered two independent reviews to look urgently and thoroughly into the matter so that we know what exactly happened and how we can make sure our rail franchise programme is fit for purpose.”

He added: “West Coast passengers can rest assured that while we seek urgently to resolve the future arrangements the trains that run now will continue to run, with the same drivers, the same staff and timetables as planned. The tickets that people have booked will continue to be valid and passengers will be able to make their journeys as planned.”

The most senior civil servant at the department, Philip Rutnam, said: “The errors exposed by our investigation are deeply concerning. They show a lack of good process and a lack of proper quality assurance.

“I am determined to identify exactly what went wrong and why, and to put these things right so that we never find ourselves in this position again.”

The first independent review will be overseen by Centrica chief executive Sam Laidlaw and former PricewaterhouseCoopers strategy chairman Ed Smith, to work out what went wrong with the award of the west coast franchise. The second review, to be undertaken by Eurostar chairman Richard Brown, will examine the wider rail franchising programme and look in detail at whether changes are needed to the way risk is assessed and to the bidding and evaluation processes, and at how to get the other franchise competitions back on track.

The Dft said it found evidence of significant flaws as its officials were gathering evidence in preparation for legal proceedings.

These flaws stem from the way the level of risk in the bids was evaluated. Mistakes were made in the way in which inflation and passenger numbers were taken into account, and how much money bidders were then asked to guarantee as a result.

The department said it could not be confident that these flaws would not have changed the outcome of the competition or that any of the four bidders would not have chosen to submit different offers.

The four bidding companies – First, Virgin, Keolis-SNCF and Abellio – will all be compensated, and have been assured a fresh competition will be started.

EU transport chief calls for common rail standards

Category : Business

Siim Kallas vows to push ahead with reforms requiring national rail networks to open up to competition

A single European rail network with genuinely open competition and common standards is urgently needed to let trains relieve congested roads, according to EU transport commissioner Siim Kallas. He has vowed to push ahead with reforms requiring national rail networks to open up, which could lead to direct trains from Britain to destinations across the continent.

At the opening of Innotrans, Europe’s largest transport convention, in Berlin, Kallas said €20bn (£16bn) of a €50bn European infrastructure fund could be made available for national transport projects to make the networks interoperable, helping stimulate growth. He proposed a single central rail agency to certify all new rolling stock built to a single standard across the continent.

“There must be a genuine single market,” he said. “Eighty per cent of people and goods are taken by Europe’s roads, and they are saturated. People expect railways to provide some alternatives.”

The German transport minister, Peter Ramsauer, said such reform was needed but would be “incredibly difficult” to implement and would cost €4.5bn for the German track alone. He urged Kallas to think further, suggesting that achieving common standards should be intercontinental, with China drawing up plans for a high-speed connection from Europe across Russia to Xinjiang.

Kallas said he believed opening up national markets along the lines of Britain’s franchising model was beneficial to passengers and had provided better value for money. He said few other EU states had truly opened up their markets to competition, despite previous directives, with conditions skewed in favour of domestic operators, particularly where train companies still operated the track. In Germany and France the state firms Deutsche Bahn and SNCF still dominate.

Ramsauer said he would welcome competition, but accused the French of dragging their feet. “If we want to travel by ICE (the German fast train) from Frankfurt to London, we need France to open up and so we absolutely have to do the same in Germany,” he said.

However, the minister said he did not believe that Britain’s experience had provided a good model for regulation of the network. “In Britain, they took it to excess and failed. We will not make that mistake. We will keep a government role.”

The Deutsche Bahn chairman, Rüdiger Grube, welcomed the idea of more competition – “so we can show how good we are,” he said.

The convention in Berlin is expected to pull in 100,000 trade visitors from around the world, with 115 new trains on display on tracks outside 26 large conference halls filled with global exhibitors ranging from Bombardier and Siemens to small suppliers of parts. Network Rail also has a presence here as its new, deregulated private consulting arm touts for business abroad. Gwyn Topham Berlin

Richard Branson could face MPs over west coast mainline franchise gripe

Category : Business

Department for Transport concerned judicial review may delay or throw off course rail franchising system

Virgin tycoon Sir Richard Branson could be facing MPs in parliament next week to make his case that the award of the west coast mainline franchise was flawed, as doubts grow that the government can stick to its rail franchising timetable.

After the 11th hour application to the high court from Virgin’s lawyers last Tuesday stopped the planned signing off of the west coast contract to FirstGroup, the rail minister, Theresa Villiers, told the Commons on Monday: “As a result of a legal challenge, which the government intends to defend robustly, we have not yet signed the contract with First West Coast, and consequently the competition remains live.

The transport select committee will on Tuesday discuss bringing representatives of Virgin Trains and FirstGroup before them to answer questions about the process that saw the incumbents lose the franchise they held for 15 years after being outbid by up to £2bn for the rights to run trains from London to Glasgow until at least 2026.

Branson, who would be one of the more high-profile witnesses ever to appear before the committee, has indicated he would fly to London to attend. Tim O’Toole, the chief executive of FirstGroup who has frequently faced MPs before, would also answer questions.

The transport secretary, Justine Greening – should she survive the cabinet reshuffle – will also face questions at a separate session next Wednesday. The chair of the committee, Louise Ellman, had asked her to delay the franchise award for parliamentary scrutiny.

Meanwhile, there are growing concerns within the Department for Transport (DfT) that the judicial review may delay or throw off course the rail franchising system.

The 11th hour application to the high court from Virgin’s lawyers last Tuesday stopped the planned signing off of the west coast contract to FirstGroup. Should judges decide that the DfT needs to defend the process in court, the timetable for other planned awards is likely to slip.

Four major franchises are due to be decided in 2013, including the currently state-run east coast mainline and two operated by FirstGroup – the Great Western and Thameslink services.