Virgin boss Sir Richard Branson has made good on his promise to fight the government’s recent award of the West Coast main line franchise to FirstGroup. With the contract due to be signed yesterday morning, Branson filed an application for a judicial review of the decision late on Tuesday.
Branson had been hugely critical of FirstGroup’s win of the next 14-year franchise for the London to Manchester and Glasgow service. As well as claiming that the firm’s winning £7bn bid was based upon unrealistic and unworkable increases in passenger numbers and incomes, Branson said that FirstGroup would end up defaulting on its contract – costing the taxpayer millions in lost payments.
Since losing his bid, Branson has waged an extensive PR battle, taking to Twitter to denounce the contract and the bidding process, then offering to run the service on a not-for-profit basis to give Parliament time to review the decision. He has mustered significant public support to his side, garnering over 150,000 signatures in an online petition.
However, Branson has begun what could be a lengthy legal process. While it is unlikely to affect the day-to-day running of the line, it could take up to three months to complete if grounds for a formal review are confirmed. This would take the government right up to the planned start of FirstGroup’s contract.
Experts believe that Branson has little to lose by fighting the decision, with the £14m cost of his original bid already gone and the potential for another lucrative contract if he succeeds: over the past 15 years, Virgin made 6.6% average annual operating margins – among the best performances of all the country’s rail franchises. However, despite Branson’s popular image, the legal action could risk any mistakes by, or criticisms of, his empire’s management spilling out into the open.
As a seasoned PR whizz, though, he will surely have sized up any potential pitfalls and reasoned that it is worth a roll of the dice.