Naivety, over-optimism and mismanagement contributed to East Coast franchise failure | Global Rail News
Naivety, over-optimism and mismanagement all contributed to the failure of Virgin Trains East Coast’s (VTEC) Intercity East Coast franchise.
That is according to the UK’s Transport Committee, which has published a new report into what went wrong.
VTEC – a joint venture between Stagecoach and Virgin – “simply ran out of money” because revenue projections underpinning its bid were over-optimistic, encouraged by unrealistic benchmarks in the invitation to tender, the report concludes.
Nevertheless, had the Department for Transport (DfT) conducted appropriate due diligence and identified the weaknesses underpinning the bid, the franchise may not have failed, the report continues, stating that the DfT must take some responsibility for the franchise’s failure. Naivety, over-optimism and mismanagement contributed to East Coast franchise failure | Global Rail News