14/08/2012 12:24 BST

Virgin Rail To Lose West Coast Franchise

Sir Richard Branson's train company is set to lose its West Coast main line rail franchise in a government decision which will spark a storm of protest.

In an imminent announcement, the government is expected to say that transport giant FirstGroup has beaten Virgin Rail in the new-franchise battle to run the London to Scotland line.

It will mean an end to Virgin's 15 years of operating the line which has seen tilting, high-speed Pendolino trains serve such cities as Birmingham, Manchester, Liverpool and Glasgow.

The West Coast carried around 13 million passengers a year in 1997. The annual total is now around 31m.

FirstGroup, which already operates a number of rail routes including Great Western and ScotRail, is believed to have outbid Virgin on West Coast, bidding as much as £7 billion to operate the new 14-year franchise which will begin in December.

It is also thought that FirstGroup could operate West Coast under the name Horizon Trains Limited, with a firm of this name having been registered at Companies House.

Virgin Rail, which is 49% owned by another giant transport company, Stagecoach, could mount a legal challenge if it loses the franchise.

Labour and transport unions have already warned that a change of ownership could mean higher fares, poorer services and job cuts.

RMT general secretary Bob Crow said: "Whoever wins the West Coast route, and all the signs point to FirstGroup, they should be left in no doubt that we will mount a massive industrial, political and public campaign to stop any attacks on our members' jobs and the services that they provide to the travelling public."

He added that the franchise was being let "with a gold-plated, 12-year contract linked to massive cuts to jobs and passenger services and huge increases in fares as the winning bidder battles to extract every penny that they can in profit".

Simon Weller, national officer of the train drivers' union Aslef, said: "The government is always seduced by the big buck, but any savings on the franchise will have to come by cutting staffing or higher fares."

Shadow transport secretary Maria Eagle said: "Passengers are set to lose out no matter which companies win these new longer franchises because ministers have promised successful bidders they can hike fares, cut services and close ticket offices."

Rail Minister Theresa Villiers said: "Labour have admitted that their only transport policy is rail renationalisation with huge costs and massive upheaval for our railways."

She added: "We are currently evaluating bids for the Intercity West Coast franchise. All franchise bids are judged on their affordability, deliverability and their value for money for passengers and the taxpayer."