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U.K. Civil Servant Suspended on Rail Deal Denies Responsibility

A British civil servant reported by media as having been suspended for the mishandling of a 5.5 billion-pound ($8.89 billion) rail-network contract denied responsibility for the failings.

Kate Mingay, who U.K. newspapers had named as one of three Department for Transport staff suspended, said she was not responsible for the forecasts that contributed to the West Coast inter-city rail franchise being awarded to FirstGroup Plc (FGP) over Richard Branson’s Virgin Group.

The August decision to grant FirstGroup the contract for London-to-Scotland trains was overturned Oct. 3 because of “serious flaws” regarding the choice of bid, according to Transport Secretary Patrick McLoughlin, who said staff were suspended and three other franchise tenders frozen. Among errors cited was a failure to take full account of inflation and passenger numbers.

“Neither I nor any member of my team had any responsibility for the economic modeling for this project,” Mingay, who according to her LinkedIn profile used to work for Goldman Sachs (GS) Group Inc., said in an e-mailed statement. “I have not been involved in briefing Department for Transport ministers or other government ministers in respect of this project.”

Media including the Daily Telegraph, the Guardian and the Independent newspapers named Mingay as one of the staff suspended this week.

Opposition Labour leader Ed Miliband described the withdrawal of the rail contract as a “fiasco” and a “disgrace” in his speech to the party’s conference on Oct. 3.

The West Coast route, operated by Virgin since 1997, was due to transfer to FirstGroup for at least 13 years on Dec. 9.

The decision threatened to exclude Branson from the U.K. rail industry for the first time since its privatization. The Virgin founder said he made a “strong and deliverable” offer for the West Coast line, which transports 31 million people a year to cities including Birmingham, Edinburgh, Glasgow, Liverpool and Manchester.

To contact the reporter on this story: Alex Webb in Frankfurt at awebb25@bloomberg.net

To contact the editor responsible for this story: Chad Thomas at cthomas16@bloomberg.net

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