Branson's Virgin gets UK rail franchise extension

Britain said Thursday that Richard Branson's Virgin Rail will run a key rail franchise for a further 23 months, after the government was forced to scrap the bidding process because of errors. The tycoon said the decision to extend his company's hold on the West Coast main line from London to Glasgow in Scotland, which Virgin Rail has run since 1997, was a "perfect early Christmas present". The government in August stripped Virgin of the franchise and gave it to rival FirstGroup, but in October it cancelled the decision saying that transport ministry officials had made serious mistakes during the bidding process. "The new franchise agreement will run for up to 23 months after which the West Coast Main Line will be let under a long-term franchise," the ministry said in a statement. Transport minister Patrick McLoughlin said that under the deal which runs until November 2014 there would be a new hourly service linking Glasgow and London. An enquiry into the collapse of the deal is due to report later on Thursday. Three transport ministry officials remain suspended for their part in the bidding process. Branson said that his lawyers had given him a less than 10 percent chance of succeeding with his appeal against the decision in August, but that he had been determined to continued. "This is a perfect early Christmas present for our wonderful Virgin Trains staff and customers. Onwards and upwards in 2013 and beyond," he said in a statement on his blog. Virgin Rail -- 51 percent-owned by Virgin Group and 49 percent by transport firm Stagecoach -- has been running the route since 1997. During that time it introduced tilting high-speed Pendolino trains and more than doubled passenger numbers. FirstGroup bid a basic £5.5 billion (6.8 billion euros, $8.9 billion) to run services until 2026, £700 million more than Virgin had offered. The West Coast Main Line is the busiest and the most important inter-city rail route in Britain, connecting London to major cities including Birmingham, Manchester, Liverpool and Glasgow.