News | Published July 07 2019

Nationalisation of East Coast mainline extended until 2025

According to filings made with European authorities, the Department for Transport has extended the nationalisation of the East Coast mainline by up to five years, keeping it in public hands until 2025 before a full takeover is finalised.

This comes in spite of Transport Secretary Chris Grayling initially saying that government control would be a “temporary” measure, with the state to oversee the franchise until a new public or private partnership would then assume control in 2020.

The line was nationalised for the third time since 2007 back in June 2018 after it suffered around £200 million in losses under the jurisdiction of Stagecoach and Virgin.

The recently uncovered filings show that the DfT has given the so-called Operator of Last Resort for the railway line an extension until mid-2025 before it assumes full control.

The current Operator of Last Resort is an arm of the London North Eastern Railway [LNER] brand.

Meanwhile, former head of British Airways Keith Williams is conducting a thorough review of the railways on behalf of the government and has said that the industry’s current business model simply “cannot continue” in its current fashion.

Speaking on the extension, a DfT spokesman said: “The current contract with LNER expires on June 28 2020. This update notifies the market that our intention is to enter into a new direct award contract with LNER. 

"This will ensure a smooth transition for passengers and staff into the East Coast Partnership and means the recommendations of the Williams Rail Review can be implemented as quickly as possible.”

The extension granted by the DfT to LNER is the first of its kind. No contract extension, officially known as a “direct award prior information notice” has ever been handed out when the line has been under public control in the past. 

The East Coast mainline was first privately awarded to Great North Eastern Railway [GNER] in 1996 following the abolition of British Rail under the Major administration. GNER went on to lose the franchise to re-nationalisation in 2007 amid financial issues.

National Express were the next to assume control before the government took it back in 2009. Stagecoach and Virgin then took over in 2015 before it was nationalised for the third time last year.

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Authored by

Scott Challinor
Business Editor
July 07 2019

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