What's the future of Cross-Country?

What are we to make of this?

The Strategic Rail Authority (SRA) today announced that it had not received an acceptable offer from Virgin Rail Group (VRG) in the renegotiation of the CrossCountry rail franchise.

A Best and Final Offer for a single-tender deal running to 2012 was recently received from VRG, but was significantly too high to pass the value for money test that the SRA undertakes on behalf of taxpayers. As a consequence, the SRA informed VRG this afternoon that it is ending negotiations on the CrossCountry franchise.

The SRA's rights, which are designed to protect the interests of both passengers and taxpayers, are contained in a 'Letter Agreement' signed between the two parties in July 2002. This gives the SRA the right to terminate the franchise should it be unable to reach agreement on a long-term deal.

The SRA has informed VRG that it reserves its right to terminate the franchise, and that it will inform VRG of how it intends to take matters forward on the franchise in the near future. In the meantime, the annual budgeting process will continue on the franchise.

Services on CrossCountry are unaffected.

The Guardian has some comments on the issue.

The failure of talks means the SRA could throw open the competition to rival bidders, or choose to share out the network between other train operators.

One industry source last night suggested the government wanted to redistribute Virgin's new Voyager trains to replace ageing fleets on other inter-city lines.

CrossCountry trains are among the most heavily subsidised in Britain receiving �241m last year. They have been crippled by problems with overcrowding and punctuality.

Cross Country used to be the cinderella of the Inter-City network, relying on hand-me-down trains from other, more prestigious routes. When Virgin trains took over the franchise on privatisation, they replaced their entire fleet of trains with shiny new ones, a far greater investment than this network of routes had ever seen before. One has to ask if it was justified, especially when the new trains turned out to be so unsuitable for some of the routes. It would have made more sense for them to have built a much smaller fleet of new ones, and refurbished some of the older ones.

Quite what the future holds now is anyone's guess. The SRA seems to be taking a short-term bean-counting approach to running the railway, and the constant musical chairs of franchising is getting more and more ridiculous; First lose North Western but gain Scotrail, Arriva lose Trans-Pennine but gain Wales, National Express lose Scotland and Wales but gain East Anglia. Now it's Virgin's turn. One could say they had this coming with the fiasco of Operation Princess.

What might happen if the SRA breaks up the Cross-Country franchise altogether and splits up the services between the other intercity franchises? Will the Voyagers be redeployed on other routes, and the 'ageing fleets from other inter-city lines' (i.e. Inter-City 125s) return to the cross country routes? Personally I think we ought to see cascaded Mk3s from the West Coast line hauled by the EWS class 67s made more-or-less redundant with the end of the mail trains. Which operator might run the long-distance trains such as those running between Scotland and Cornwall? Might those trains even disappear altogether?

I think it's a case of watch this space...