Oct 18 2012
Taxpayers could be left with an even-bigger multimillion-pound bill for the West Coast mainline fiasco than first feared, Labour has claimed.
Shadow transport secretary Maria Eagle said train firms might sue for losses suffered when the Government scrapped its decision to award the franchise to First Group. The company's share price fell 20%, wiping millions off its value.
Meanwhile, Transport Secretary Patrick McLoughlin faced calls to abandon plans to re-privatise the East Coast mainline amid the ongoing mess surrounding the West Coast deal.
It has already sparked two inquiries, will cost taxpayers at least £40 million in refunding firms which bid for the contract, and has led to the suspension of three Department for Transport officials. Ms Eagle demanded another, "truly independent" inquiry.
She said: "The cost to taxpayers is likely to be in the tens of millions of pounds more by the time you've got Britain's rail services back on track.
"You're going to be handing millions over to private train companies, millions spent running three competitions for this franchise when you should have only been running one, and millions more if companies decide to sue the Government for the losses your department's incompetence has caused them.
"Don't taxpayers deserve a truly independent inquiry into what went wrong and who was to blame for so much of their money being poured down the drain?"
Mr McLoughlin said he ordered two immediate inquiries because "I wanted to get to the bottom of this as quickly as I could".
He said: "I'm sure we will not be short of a number of inquiries which will take place subsequently. I expect the Public Accounts Committee will certainly want to look at the issue."
Mr McLoughlin also confirmed that negotiations on how much Virgin will pay to the taxpayer to continue running the West Coast Main Line in the short term have not been concluded.