PwC examined doomed West Coast deal

by Richard Crump

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04 Oct 2012

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TECHNICAL FLAWS in the way the franchise process for control of the West Coast Main Line was conducted emerged after the Department for Transport (DfT) called in PwC to look at the deal.

In a statement on the cancellation of the West Coast franchise competition, which had seen control of the line awarded to FirstGroup over incumbent operator Virgin Trains, the DfT admitted that significant flaws had been discovered in the way the bidding process had been conducted.

These flaws, which stem from the way the level of risk in the bids was evaluated as a result of mistakes in the way inflation and passenger numbers were taken into account, and how much money bidders were then asked to guarantee as a result, emerged after PwC was called in by the DfT.

According to The Times, PwC was called in by former transport secretary Justine Greening to vet figures compiled by DfT staff following an aggressive legal challenge from Virgin. Her successor, Patrick McLoughlin, was notified on Monday evening that the numbers didn't add up.

Former PwC strategy chairman Ed Smith has also been called in by the DfT to lead an independent review, along with Centrica chief executive Sam Laidlaw, into what went wrong with the award of the franchise.

An initial report is expected to be delivered by the end of October.

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