Virgin has retained the right to run trains on the West Coast main line through Rugby – and has promised changes to the town’s station.
The £35 million contract will run for two years and nine months, with Rugby station being equipped with ticket gates and free wireless internet access.
As part of the deal, 21 first-class carriages will converted to standard class, providing 5,500 extra standard seats per day across the network.
Some £2.5 million will be spent on improve the interiors of the Pendolino train fleet, with £2.75 million spent on improving catering facilities.
Transport secretary Patrick McLoughlin said: “This deal will provide thousands more seats and better journeys for the tens of thousands of passengers who use these services every day. The West Coast provides a vital artery between London and Scotland and it is crucial we do everything we can to improve services on this much-used route.
“This is further proof of our commitment to get the best deal for passengers and taxpayers with Virgin set to pay more than £430 million to run the franchise. It’s all part of our long-term economic plan to drive forward our economy and provide better services now and great services with HS2.”
Patrick McCall, Virgin Trains executive co-chairman, said: “We’re delighted to have reached a deal after some tough negotiations with the Government.
“This deal is great news for passengers and taxpayers, with significant benefits for our customers as well as a big increase in the money we pay to government. We know wifi is high on our customers’ priorities and we’re delighted that we’re going to be able to offer them free and super-fast wifi. Together with thousands of extra seats and plans for new services, this deal will mean big improvements for millions of Virgin Trains passengers.”
The Department for Transport ran into controversy in 2012 when it awarded the contract to FirstGroup. Virgin, which had been running the West Coast line since 1997, threatened to sue, and the Government scrapped the deal, giving the route back to Virgin Trains to run on a temporary basis. The failed tender cost the taxpayer £50m in legal and consultancy bills.
Responding to the new deal, shadow transport secretary Mary Creagh said: “This is the latest chapter in the botched West Coast franchise process, which has left passengers and taxpayers paying the price for Government incompetence. Under this out-of-touch Government, fares have risen 20 per cent on average since 2010 adding to the cost-of-living crisis.
“The West Coast’s long-suffering passengers will welcome £35m of service improvements, but this franchise process has already cost taxpayers at least £50m directly and hundreds of millions of pounds more through delays to investment on the line and other franchise competitions.”